What is a RIF? How is it different from a layoff?
November 16, 2021
When your company is faced with downsizing employees, you could proceed with a Reduction In Force also known as a RIF, a layoff, a furlough, or a combination of the three.
With each downsizing option, it’s important to plan carefully before proceeding.
Your plan should include not only how you will downsize your workforce, but also what will happen next to the departing employees.
Will you provide support to help them with their career transition as part of their severance package?
What services are available to support separating employees such as outplacement services, and how will providing outplacement support benefit your company?
Let’s discuss in more detail how to best navigate employee separations.
RIF vs layoff - How are these downsizing options similar?
When a company must downsize its workforce, it will typically either layoff employees or undergo a reduction in force also know as a RIF.
Both scenarios have the same end result for the employee – a separation from the company that will require them to conduct a job search to find a new position.
In both cases, the employee can receive unemployment benefits, if eligible.
Reduction in Force vs Layoff – How do these options differ?
What is a RIF? What is a Layoff?
A RIF or Reduction In Force is a decision to permanently eliminate a position or an entire location or department with no plan to rehire in the future.
In contrast to a RIF, a layoff is a situation where headcount is temporarily reduced due to a company’s downsizing or restructuring, typically due to a decline in company performance.
Although the employer plans to eventually rehire for those positions that were a part of a layoff, they won’t do so until company performance has recovered, which they anticipate will not happen in the short-term.
On rare occasions, a laid-off employee may be called back to work shortly after a layoff, but this is unusual.
In most cases, the employee separation due to a layoff is a permanent one, and should be treated as such from the onset to enable an exiting employee to move forward.
A temporary employee separation with the intention of a return to work is typically referred to as a furlough, not a layoff.
How will you handle your downsizing?
Your company’s human resources department should carefully review the federal Worker Adjustment and Retraining Notification Act early in the restructuring process.
The WARN Act requires employers to provide advance notice of mass layoffs to employees.
Depending on the size of your company and the number of people being separated, your company may be required to give advance notice to employees before the downsizing to comply with the WARN Act.
In addition to this, unique state requirements for employee notification may need to be considered.
You will need to identify any employees needing a transitional period. Recognize that every employee separation conversation will not be the same.
Some employees may need to stay on for a transitional period before their final exit. To ease this situation, incentives are often utilized by HR departments.
Severance packages are generally a standard practice.
The structure of severance agreements will depend on many factors such as the existing employee’s length of employment, their position within the organization, and the desired length of the transitional period.
Sometimes retaining key employees during a transitional period can even bring to light a need to keep certain employees. Realizing which employees are too valuable to lose can save your company a great deal in the long run.
However, most of the employees identified for RIF or layoff will be downsized as planned.
One of the ways you can support your exiting employees is by providing them with outplacement services.
Through outplacement assistance, employees impacted by the RIF or layoff can get help with things like resume writing, job-search, and career coaching.
By helping your employees through this career transition, you will help to maintain positive relationships for the future. You will also show them that you do care about their continued success.
Benefits Of Outplacement Services When Downsizing
There are many benefit of using outplacement services when faced with downsizing due to a reduction in force or layoff. And they begin with the fact that it’s simply the right thing to do for your employees.
Why is this a benefit? Because when a company is forced to downsize it hurts. It hurts the company as well as the employees.
That pain is felt throughout the company and, sometimes, even further than that. The world at large can tune in and pay attention to how your company handles the pain of downsizing.
Will your company wash its hands of its former employees and move on to the next project? Or will you appreciate the sacrifices your employees have made for your company? Will you do what you can to support them to their next position?
How important is your brand’s integrity?
Providing strong support through outplacement services can also help maintain and improve company morale. People talk, employees are friends, and that doesn’t stop when someone is laid off or is terminated.
Employees who have been laid off or are the subject of reduction in force may apply for unemployment benefits. Offering outplacement services can save your company money in the long term. Outplacement helps employees return to work sooner, thus potentially lowering unemployment claims.
How Quest Outplacement Can Help
For over 20 years Quest Outplacement has helped downsized employees navigate their career transition. We work with companies of all sizes and employees at all levels within the organization.
According to the American Management Association and Institute for Corporate Productivity, U.S. employers spend an average of $3,589 per displaced employee. Comparatively, our programs are very affordable, starting at only $995 per exiting employee.
We have 4 outplacement program options. Depending on the outplacement program you offer, our robust services include the following:
- personalized, one-on-one consultation time with a career coach
- a minimum of 3 months of support
- an effective resume written by a professional resume writer
- LinkedIn Profile support
- a cover letter to highlight strengths
- resume posting to the top online job sites including Indeed
- an online career assessment tool to provide career direction
- a personalized salary report to aid in salary negotiations
- access to a 24/7 online career portal
We understand that not every displaced employee will take advantage of outplacement services, despite how valuable they are.
You will only be charged for the employees who enroll in the program.
You will be provided with Notification Letters with which to inform displaced employees of the available outplacement service that you can personalize for each employee to include as part of their separation package agreement.
We will follow up with them after their separation.
At Quest Outplacement we strive to provide the smoothest transition experience for every displaced employee. We’ve been perfecting our methods for over 20 years. We would welcome the opportunity to help your organization support your exiting employees.