Important things to consider from someone who’s been on both sides of the reduction in force conversation

The boss's perspective

I remember it like it was yesterday. The year was 2000 and I was a business strategy consultant at a mid-sized firm. I had just rolled off a high-pressure, incredibly engaging 8-month project and had helped sell and deliver the largest project our company had ever won. I was not too worried about my job, but the dot-com bust was big and the papers were full of layoff news and companies going through RIFs.

It was around that time that I was asked to meet with our firm’s newly named head of communications to advise her on how to set up an internal communications function. There were four people in a conference room, including one of the founding partners. Just before the meeting began I got a call from a colleague. He was driving around Atlanta, calling his direct reports to tell them to start looking for new jobs.

I walked into the meeting and asked the question: Are we about to announce layoffs? The senior partner shushed me. “Do NOT mention anything about layoffs,” he said. “We haven’t told anyone.”

“Really?” I said. “A friend of mine is calling his people right now, telling them to start looking.”

“Who?” the leader asked.

“It doesn’t matter — and I’m not saying,” I said. “His boss told him, and he’s just making sure his people don’t get caught by surprise.” Besides, all you had to do was read a newspaper to figure out that bad news was coming.

I wasn’t going to wait for the fireworks. A few days later, I got out. After a short conversation with the CEO of a venture-funded startup, whom I had met at a cocktail party, I accepted her offer to become her head of strategic communication.

The importance of transparency during lay-offs, rifs and times of uncertainty 

I hadn’t exactly looked closely before I leapt into that venture-funded startup, and it wasn’t long before I had to think about what we would do if we didn’t get the next round of funding. I had no doubt that a reduction-in-force (RIF) was on the horizon.

Many of the people who would be losing their jobs were the same people who had slept under their desks to build the company. I talked with the CEO, and she agreed that I could be transparent with the employees about our financial situation and the potential implications.

I wrote a letter to all employees telling them where we stood. At that point we had enough to continue paying a full staff for another two months; after that, we would have to start cutting jobs. I acknowledged that many of them had families, mortgages, and other responsibilities that might make it difficult to tolerate the uncertainty. If that was the case, we asked them to let us know, and that we would do everything we could to support them with their job searches, including giving them time during the workday to do what they needed to do.

No one left. No one started to sabotage the company. “Tell day” was sad, but the process was compassionate. Within two weeks of their last days, everyone who lost a job got taken out to dinner by their teams. We wanted to send a message: you lost a job, but you didn’t lose the community you built.

Forging a new approach

When I joined Mercer eight years ago, my change management colleagues were helping clients execute that same secretive process over and over again. I disagreed with the approach, but was nervous about taking a stand since I was new and I didn’t want to alienate anyone.

A few months later, I was asked to meet with the head of a family-owned business that was putting itself up for sale. The business was small, and many of the employees had spent their entire careers with the company. The investment bankers recommended that the employees be kept in the dark about a potential sale until the deal was done.

I drafted a statement of work, as requested, and emailed it to the chairman. Since we had already completed a project initiation agreement, I went to work on a “leak plan”, which detailed all the different types of messages you might need if word got out about a layoff or any other major organizational change before the planned announcement.

After a few days, the chairman called to say he should have given me his personal email address.

“Why?” I asked.

My email with the SOW ended up in the spam box. Someone in IT read the email, realized what it was, and asked his boss about it. The two of them called the chairman and were on their way upstairs to talk.

I sent the “leak plan” immediately, and, as luck would have it, the conversation went very well. The two men agreed to keep the news to themselves until the leaders were ready to make the official announcement. But senior leaders realized how difficult it was going to be to contain a leak, so a couple of weeks later, they decided to tell their employees what was going on.

Information is almost impossible to contain

Hiding information may have been possible in the old days, but it is nearly impossible today. Information is an airborne virus; it moves fast and mutates — way faster than your PR team can spin the tale and way faster than you can assemble your people and escort them out the door.

But that’s not really the point. Why wouldn’t you treat your own employees — the people who chose to work for you, who took your goals to heart and did their best to help you succeed — like a truly precious constituency? Maybe you think business is business and I save my warm and fuzzy sentiments for my family and friends. Maybe you just don’t want to face the unpleasantness of delivering bad news.

The six rules for an empathetic reduction in force

Now I’m better at RIFs. Not just because I’ve had more practice (sadly, I have), but the pandemic and all the noise about environmental, social, and governance (ESG) strengthened my conviction and gave me a little more courage to speak up.

At Mercer, we talk a lot about combining empathy and economics. There’s no avoiding the necessity of adapting, reorganizing for the future, and cutting the jobs that no longer enable your success. Even if half your work is done by robots, your people matter. How you treat them will become part of your brand. If sheer appreciation for your workers’ humanity isn’t enough to get you to help them land on their feet, consider the value of your brand and the enormous cost of rebuilding it after a badly managed crisis .

So if you’re faced with having to make difficult employee decisions, remember these six rules for an empathetic reduction in force:

1. Be proactive : If your business is changing — due to exogenous or endogenous circumstances — your people are going to figure it out. So, tell them what you know. Be transparent about the reasons you are cutting jobs.
2. Be the kind of leader your people can trust: People are a lot less likely to react negatively or bad mouth the company if you’ve treated them well all along.
3. Form severance policies and offer outplacement services you can highlight in your ESG report: After all, the “S” stands for social, as in social justice. It’s all well and good that you’re building a school in a remote village in Malawi, but not so much if you let your people walk out the door afraid they won’t be able to pay the rent next month.
4. Provide high-quality transition support: Do as much as you can reasonably do to help your exiting employees find their next jobs.
5. Maintain the social connections: It’s hard enough to lose a job, but chances are high that your employees have made great friends at work. Help keep those relationships alive.
6. Protect your brand and your individual credibility: You may scoff at “cancel culture,” but people don’t like buying products or services from companies that mistreat their workers. And once you start misleading people, it’s very hard to win their trust back.

For more information on outplacement services from Mercer , please contact us today at surveys@mercer.com or 855-286-5302.