Time to Consider a Reduction in Force?

Time to Consider a Reduction in Force?

After careful consideration, many U.S. employers have been reevaluating their workforce and deciding that an immediate reduction in force (RIF) is necessary to reduce costs and increase efficiency during these uncertain times. Now is the perfect time to start thinking about whether the size and composition of your workforce is optimal, considering the current market conditions.

Is your organization prepared to absorb the potential shock of a recession, or do you need to consider a permanent reduction?

First, consider whether any alternatives could save the same amount of money:

  • Limit Overtime — Reduce or eliminate opportunities to work more than 40 hours per week.
  • Reduce Benefits — Temporarily adjust insurance premiums and cut non-essential benefits.
  • Hiring Freeze — Temporarily pause the hiring of non-essential employees.
  • Natural Attrition — A gradual process in which employees leave and are not replaced.
  • Part-time/Temporary Employee Layoffs — Redistribute part-time/temporary employees’ responsibilities to full-time employees.
  • Mandatory Furloughs — Require a temporary leave of absence or a reduced schedule.

Sometimes, a reduction in force is still the only feasible option. There are two types of workforce reduction programs:

  • Voluntary — The employer provides incentives to eligible employees who can decide whether they would like to agree to these terms and terminate their employment.
  • Involuntary — The employer selects certain employees for termination and offers them incentives in exchange for their agreement to refrain from legal action.

Reductions in force are multi-faceted endeavors that most companies are not comfortable navigating on their own or simply don’t have the capacity to execute. So, many work with a third-party service provider to design, implement and manage a reduction in force program, ultimately freeing your team to focus on other business priorities.

A skilled advisor can conduct a cost-benefit analysis of various design options to help your organization customize a program to fit your unique needs, prepare communication materials in compliance with legal requirements, perform ongoing program administration and provide outplacement services for terminated employees.

Since the decision to implement a RIF is often made after all other alternatives have been exhausted, it’s important that this solution is designed and implemented properly. In addition to managing effects on employee morale and performance, your organization must comply with various legal requirements to minimize liability.

A successful workforce reduction program can ultimately help your business avoid the pitfalls that could come along with a reduction in force. For example, a third-party service provider may be able to help you implement a voluntary separation program with a severance package as an alternative to a less favorable involuntary program. 

Connect with a CBIZ professional to learn more.


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Time to Consider a Reduction in Force?https://www.cbiz.com/Portals/0/Images/Reduction in Workforce.jpg?ver=olYIvlaMlcuAaESYxpffgg%3d%3dNow is the perfect time to think about whether the size and composition of your workforce is optimal. Is your organization prepared to absorb the potential shock of a recession, or do you need to consider a permanent reduction?2023-01-10T20:00:00-05:00

Now is the perfect time to think about whether the size and composition of your workforce is optimal. Is your organization prepared to absorb the potential shock of a recession, or do you need to consider a permanent reduction?

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