5 Tips to Compassionately Manage RIFs and Minimize Litigation
This week's troubles on Wall Street make me reflect upon an earlier downturn in the 90's in the financial services industry when I was a VP of HR for a large national retail and mortgage bank.
While working in this industry, I managed two separate selective reductions in force affecting about 85 employees, plus a plant shut down of approximately 330 employees.
Certainly it was a difficult time for me and for my employees.
My husband called me "the black widow" then, asking me at the end of each workday how many employees I'd terminated.
Once I finished managing the plant shut down, I then received my own severance package and exited the company to begin my own HR consulting practice.
I'd been offered the option of a transfer to another division or a severance package.
Quite honestly, I didn't want to manage anymore RIFs even though I'd become a subject matter expert, so I opted for the severance package.
My big takeaway lesson was that even in the worst of situations, there's still an opportunity to manage with compassion.
The investor who purchased us certainly had no compassion for our employees, yet I chose to "buffer" them from the new owners as much as possible, acting as the liaison bridging the two parties.
Following are a few of my tips for compassionately managing employees during a RIF or entire plant shut down: 1).
Communicate often and repeatedly.
As soon as possible, tell employee(s) what is happening and how they will be individually affected.
Chances are that the grapevine has been running rampant with all sorts of information and misinformation.
Your people will want to know where they stand.
In tandem with line management, tell them as much information as possible including termination dates, priority placement for internal transfers for job bidding, retention bonuses offered (if any), how the business will be transitioned to the new owners, an overview of their severance package, etc.
Anticipate what questions they'll ask and prepare a Q & A handout for all affected employees to address every pertinent issue.
They'll be shocked at the news of their job loss and not remember what's said in the notification meeting, so by putting everything in writing they can take it home and read through it again later.
Don't hold your notification meeting on a Friday afternoon.
You want them to be able to ask questions after they've digested this news, so make sure your notification meeting is followed by another workday.
This advice applies to both group and individual notification meetings.
2.
Create the richest severance package possible.
Work with operations, your CEO, your company's buyers and all involved parties to maximize the package your employees will receive between now and their termination of employment.
Include outplacement services, severance pay, benefits continuation through the severance period, unemployment benefits information, information on rolling over their 401Ks or defined benefit plans, etc.
Research comparable severance packages within your industry to minimize potential litigation, retain employees through the transition, and transfer the workload to its new assignment.
3.
Handle employee relations issues in the employee's favor.
Going through a job loss, particularly through no fault of your own, is one of the most stressful situations possible.
You will see a dramatic increase in the number and complexity of employee relations complaints and issues, no doubt.
Whenever possible, manage the situation in the employee's favor.
Allow employees time off of work with pay to go interview at other companies.
You'll end up with fewer angry employees, and we all understand all too well that it's the angry employees who files lawsuits.
4.
Go above and beyond to make a difference.
Have the unemployment department come to your worksite to enroll employees.
If you're offering outplacement, hold it on site or at a convenient location.
Consider offering outplacement services in groups of employees so they have the support of co-workers to find their next job.
Hold an onsite job fair with area employers who have open jobs they're actively recruiting to fill.
Network with your HR contacts to place your employees at other companies.
Hold ice cream socials, a BBQ, a send-off party for departing employees, etc.
Follow up and follow through on all employee requests; become a true resource for your employees during this difficult time.
5.
Work closely with your employment attorney.
Before you take any adverse actions, have your attorney review your entire process to identify any gaps, advise you in what needs to be done, provide necessary documentation, and/or identify problem layoffs in a selected reduction-in-force.
It's critical that you actively involve and work with them in every step of the way to minimize your company's exposure to litigation.
The company I worked for did not receive any lawsuits resulting from the reduction-in-force or the total plant shut down.
Follow these tips, ask yourself what more you can do, and you too will minimize your legal exposure.
Plus you will have the satisfaction of knowing that you managed this difficult situation with compassion, making it as easy as possible for your employees to transition onto their next job.
Copyright 2008 Regan HR, Inc.
While working in this industry, I managed two separate selective reductions in force affecting about 85 employees, plus a plant shut down of approximately 330 employees.
Certainly it was a difficult time for me and for my employees.
My husband called me "the black widow" then, asking me at the end of each workday how many employees I'd terminated.
Once I finished managing the plant shut down, I then received my own severance package and exited the company to begin my own HR consulting practice.
I'd been offered the option of a transfer to another division or a severance package.
Quite honestly, I didn't want to manage anymore RIFs even though I'd become a subject matter expert, so I opted for the severance package.
My big takeaway lesson was that even in the worst of situations, there's still an opportunity to manage with compassion.
The investor who purchased us certainly had no compassion for our employees, yet I chose to "buffer" them from the new owners as much as possible, acting as the liaison bridging the two parties.
Following are a few of my tips for compassionately managing employees during a RIF or entire plant shut down: 1).
Communicate often and repeatedly.
As soon as possible, tell employee(s) what is happening and how they will be individually affected.
Chances are that the grapevine has been running rampant with all sorts of information and misinformation.
Your people will want to know where they stand.
In tandem with line management, tell them as much information as possible including termination dates, priority placement for internal transfers for job bidding, retention bonuses offered (if any), how the business will be transitioned to the new owners, an overview of their severance package, etc.
Anticipate what questions they'll ask and prepare a Q & A handout for all affected employees to address every pertinent issue.
They'll be shocked at the news of their job loss and not remember what's said in the notification meeting, so by putting everything in writing they can take it home and read through it again later.
Don't hold your notification meeting on a Friday afternoon.
You want them to be able to ask questions after they've digested this news, so make sure your notification meeting is followed by another workday.
This advice applies to both group and individual notification meetings.
2.
Create the richest severance package possible.
Work with operations, your CEO, your company's buyers and all involved parties to maximize the package your employees will receive between now and their termination of employment.
Include outplacement services, severance pay, benefits continuation through the severance period, unemployment benefits information, information on rolling over their 401Ks or defined benefit plans, etc.
Research comparable severance packages within your industry to minimize potential litigation, retain employees through the transition, and transfer the workload to its new assignment.
3.
Handle employee relations issues in the employee's favor.
Going through a job loss, particularly through no fault of your own, is one of the most stressful situations possible.
You will see a dramatic increase in the number and complexity of employee relations complaints and issues, no doubt.
Whenever possible, manage the situation in the employee's favor.
Allow employees time off of work with pay to go interview at other companies.
You'll end up with fewer angry employees, and we all understand all too well that it's the angry employees who files lawsuits.
4.
Go above and beyond to make a difference.
Have the unemployment department come to your worksite to enroll employees.
If you're offering outplacement, hold it on site or at a convenient location.
Consider offering outplacement services in groups of employees so they have the support of co-workers to find their next job.
Hold an onsite job fair with area employers who have open jobs they're actively recruiting to fill.
Network with your HR contacts to place your employees at other companies.
Hold ice cream socials, a BBQ, a send-off party for departing employees, etc.
Follow up and follow through on all employee requests; become a true resource for your employees during this difficult time.
5.
Work closely with your employment attorney.
Before you take any adverse actions, have your attorney review your entire process to identify any gaps, advise you in what needs to be done, provide necessary documentation, and/or identify problem layoffs in a selected reduction-in-force.
It's critical that you actively involve and work with them in every step of the way to minimize your company's exposure to litigation.
The company I worked for did not receive any lawsuits resulting from the reduction-in-force or the total plant shut down.
Follow these tips, ask yourself what more you can do, and you too will minimize your legal exposure.
Plus you will have the satisfaction of knowing that you managed this difficult situation with compassion, making it as easy as possible for your employees to transition onto their next job.
Copyright 2008 Regan HR, Inc.
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