RIF Recovery: Healing, hope and health

A new study by Leadership IQ reveals the glaring truth about the reduction-in-force aftermath. If you have recently experienced a reduction-in-force in your organization, three-fourths of your employees are likely experiencing a decline in productivity. Fewer people are doing the work and less work is being done by those who "survived" the reduciton.

The study of 4,712 survivors in 318 firms revealed other disturbing facts:
- 64% said the productivity of their colleagues has also declined
- 81% said the quality of service the customers receive has declined
- 77% said they are less likely to recommend their organizations as good places to work
- 61% said they believe their companies' future prospects are worse

How does an organization recover from such a devastating blow? In difficult times, an organization cannot afford to have a demoralized, unproductive staff. What is the answer?

Healing
The answer begins with healing at the Senior team level. That's right - the Senior Team members must become vulnerable. Transformational leaders feel the impact of a reduction-in-force just like all other employees. Employees want to know that their leaders are real human beings. The healing process invites Senior Leaders to examine their own role in the reduction-in-force and discuss how it impacted them individually and collectively. These authentic discussions can then extend into the workforce so that healing can take place at every level of the organization.

Hope
Once healing has begun, it is time to plant the seeds of hope. To foster hope, leaders must offer a new vision of the organization that employees can help to build upon. They will help their leaders rebuild the organization and inspire them when they are down. People want their organizations to succeed. Loosening controls and opening to employee involvement is essential in this step. Appreciative inquiry is a perfect tool to use to engage the workforce and inspire hope for the future.

Health
As employees get into action to rebuild the organization, health is restored. If 75% of your employees currently feel unfocused and are struggling to put in a full day's work, imagine all of your employees feeling energized and united around a common vision. Research on successful organizations reveals this as a formula for success.

With recognition that your employees need to heal and find hope, your organization can move from devastation to health in the matter of a few short months.

Reduction-in-force: Who is really impacted?

A friend had been anticipating a pink slip for weeks. The employees of her company had been told it was coming, but of course no one knew who would be impacted. Over these weeks she experienced all of the common feelings - fear, sadness and anger. She began her contingency planning in-between her sessions of disbelief where she stared blankly into space for extended periods of time. It is shocking at first to discover that you are dispensable, after you've given everything you have to an organization for some of the best years of your life. What did all the evenings at the desk mean now? What if she had spent those weekend hours with family? What had she given up?

She was prepared for the worst. If it happened, it happened. Yes, they probably would lose the house, but she is no stranger to hard work. Someone would give her a job. The family would make it through this.

Maybe it wouldn't even be her who is impacted and all this worrying is meaningless. But what if it impacted someone in her department? They were already working with a skeleton staff. How will they get the work done? Maybe it would be better to be the one who is impacted.

She wasn't the one.

She stood there bawling helplessly as her friend and co-worker packed up her desk and prepared to leave. Memories flashed through her head of all they had been through together - engagements, weddings, pregnancy and the birth and death of family. She thought she was ready to handle whatever happened, but here she stood bawling like a -human being.

It was the moments of shared humanness that flashed through my friend's head as she watched her colleague exit, not last quarter's project. Our workplaces are stages for meaningful human connection and when the connection is broken - we mourn. In the weeks that follow the reduction-in-force my friend carries all of the same emotions she experienced before, but she is now able to add guilt to the list. She feels grateful that she has a job, but the gratitude is laced with fear and she struggles to complete the volumes of work thrown her way.

Who was truly impacted by this reduction-in-force?

The ripple effect of a RIF is far reaching and runs deep. The impact is felt for a very long time and the devastation cannot be ignored.

Look for our next blog posting: RIF Recovery: Healing, hope and health.

Is a reduction-in-force the answer?

There is no doubt that the current economic environment may require unprecedented solutions for poor business performance. The national unemployment rate climbed to 8.1% in February, indicating that layoffs might be the "go to" solution for many companies experiencing declining business results, but this solution is far from unprecedented. Any seasoned business professional has likely weathered this storm multiple times in her career as either the orchestrator or the pink slip recipient.

What research has shown is that reductions-in-force have either no impact on performance or a negative impact on performance. A study by Bain and Company of S&P 500 firms during the 2001 downturn, showed that it took six to 18 months to realize savings from job cuts. What is more difficult to calculate is the impact from the knowledge drain, plunging employee morale, loss of trust in Senior Leadership and voluntary turnover that follows a reduction-in-force. While turnover may not feel like a probable threat in the current economic environment, statistics show that voluntary turnover increases after a reduction in force by as much as 30%. Old patterns would suggest that organizations will be recruiting for professionals with talent similar to those who were displaced within 18 months to two years. Upon evaluating the long-term, negative consequences associated with a reduction-in-force, company leaders might wonder what other possibilities exist.

We know this recession is different and requires a different solution. What if organizations included those people who are the organization - the employees - in the discussion for solutions? What if the employees were trusted with complete transparency and were asked for their ideas? That is precisely what happened at Beth Israel Deaconess Medical Center. The Boston Globe reports that CEO, Paul Levy, humbly asked the 8,000 health system employees for suggestions in the name of saving jobs. He immediately began receiving ideas at a rate of 100 per hour that included cutting hours and giving up pay increases.

People want to belong to organizations, they want some sense of control over their futures and they want to see their companies succeed. Organizations have an opportunity to enlist the support of employees as a united force, fostering creativity, generosity and loyalty.

Employee involvement during tough times is an idea supported by Darrell Rigsby, author of Moving Upward in a Downturn, Harvard Business Review. He suggests that difficult times should be used to strengthen the company through:
1)Building stakeholder relationships
2)Refocusing on the core business
3)Pruning the portfolio
4)Establishing a set of core values
5)Establishing a sustainable cost structure

There are times when a reduction-in-force might be the last option to save a faltering company. In that case, leaders must become transparent, accept responsibility, over communicate and express compassion and empathy. The leaders job following the cuts will be to support the healing of the organization and the transformation into hope and eventual health.

If you have already endured the reduction-in-force and are wondering what's next, read our follow-up blog Recovery After A Reduction-in-Force.