The Art of Managing Reorgs and Reductions in Force

Major reorganizations and reductions in force (RIFs) happen—and sometimes they’re necessary. 

But here’s the thing: too often, companies jump straight to the math — lay off X number of people and hire new talent with the right skills. Sounds simple, right? Except in today’s ongoing talent shortage, that approach can backfire. 

So, what’s the smarter move? This article dives into the big questions: Who should be laid off, how is that best handled and what are the alternatives?  

These decisions can shape your organization’s resilience and competitiveness for years to come. 

The Human Impact of Reorganization 

First, it’s important to understand how a reorganization or RIF can affect all of your employees. Employees often experience stress and uncertainty during restructures, mergers or digital transformations. Numerous studies have uncovered lower levels of engagement and productivity during or after a reorg, with one study finding that 87% of remaining workers are less likely to recommend their organization as a good place to work.  

Making the right decisions now is crucial. 

Change Management 

The foundation for success is a strong change management strategy. Align managers early so they can effectively support both people and systems throughout the transition, whatever the transition looks like. This means using a structured approach to communicate updates and guide teams through process and role adjustments. 

The Growing Skills Shortage 

Before deciding to simply eliminate current roles and reshape your workforce with new workers, consider this. There’s an unprecedented skills gap driven by rapid technological change and demographic shifts. 

• Our latest ManpowerGroup Talent Shortage Report reveals that nearly 3 in 4 U.S. employers are having difficulty finding the skilled talent they need. And with new technologies debuting on a regular basis, this isn’t poised to get any easier. By 2030, 30% of current U.S. jobs could be fully automated, and 60% will see significant task-level changes due to AI integration. 
• The workforce is shrinking … and aging. By 2030, 1 in 6 people globally will be over 60, shrinking the pool of available talent and increasing shortages in many industries. Additionally, there are fewer young people entering the workforce, setting up a long-term talent shortage. 

Plan A: Enabling Mobility and Change 

In a tight talent market, retaining and redeploying your workforce is often smarter than replacing it. Here’s how to make it work: 

1. Focus on skills. Think of skills as currency everyone can collect and trade inside your company. Keep a clear, easy-to-access inventory of skills so employees know what’s valued and where they fit best. Use digital skill portfolios so people can track growth, spotlight talent and help managers make smarter decisions about who works where and on what. 
2. Look in unexpected places. Use assessments to uncover hidden capabilities that could indicate undiscovered potential. Soft skills such as adaptability, curiosity, communication, problem-solving and emotional intelligence serve as key predictors of “learnability.” 
3. Embed Learning in the Flow of Work. With skills evolving rapidly, make upskilling seamless. Integrate learning into daily tasks so employees grow without disrupting operations. 
4. Invest in Coaching. Coaching isn’t just for future leaders. Targeted coaching can address immediate needs and support employees at every level, building confidence and capability. 

Plan B: An Outplacement Program 

When layoffs are necessary, it’s important to support departing employees with an effective outplacement program. 

Here’s what outplacement can do: 

1. Reduce Additional Voluntary Turnover: Layoffs affecting just 1% of the workforce have been shown to lead to a 31% increase in voluntary turnover. Demonstrating care and support for employees can significantly reduce this turnover. 
2. Minimize Additional Costs: Helping employees land their next job more quickly can reduce risks and costs. Candidates that work with our outplacement program have been shown to land new jobs 2X faster than the Bureau of Labor Statistics (BLS) average.  
3. Boost Employee Engagement, Productivity and Morale: When remaining employees see that their departing colleagues are being treated with respect and given the support they need to transition, it reinforces trust in leadership and the company more broadly.  
4. Attract New Talent: Creating positive employee experiences for both exiting and retained employees can attract new talent in the future. Companies benefit from positive word-of-mouth and referrals from former employees who have had positive experiences with outplacement programs.  
5. Mitigate Legal Risks: Providing human-centered outplacement services can help mitigate legal risks associated with layoffs.   
6. Preserve Your Employer Brand: Layoffs can negatively impact an organization’s reputation with customers, current employees and potential job candidates. By offering outplacement support, companies show they value their people, which helps maintain a positive public perception. 

A Case Study 

To grow in a rapidly changing healthcare market, a Right Management client made a major strategic shift that required closing an entire division. Their goal was to retain and remobilize as much talent as possible while supporting a speedy and successful transition to new roles outside the organization for those who wished to leave.  

The Solution 

Right Management provided a tailored solution that used a “both/and” approach to allow for internal mobility as well as outplacement. We partnered closely with the organization’s in-house Career Services team to design a detailed playbook that was used for communication, training and guidance of both the client’s and Right Management’s delivery teams. We also scheduled a series of webinars to prepare the candidates for internal remobilization and standard outplacement programs. 

Results 

• Candidates in the outplacement program secured new roles in an average of 9.75 weeks, compared to the healthcare industry standard of 24 weeks. 
• 98.5% of participants reported being “satisfied” or “very satisfied” with their experience. 
• The organization realized a net benefit of $11 million from the outplacement program. 

The Human Side of Change 

Change is inevitable, and it’s crucial to have a detailed plan for enacting any reorganization or reduction in force. To support your employees while safeguarding your brand and mitigating organizational risks, human-centered mobility and outplacement services become an indispensable tool for companies of all sizes.