Friday, May 14, 2010

A Word About RIFs

In case you don't know what I'm talking about, RIF means Reduction In Force, aka layoffs. I've had to tell people that they were getting RIFfed. I've been on the surviving end of RIFs. They are anathema to the white-collar workforce, but they are commonplace within large companies.

I am currently working as a consultant for a large company. Since I've been there, the company has gone through 3 RIFs. We're talking about one year. There are countless reasons for RIFs: economic downturns, re-structuring, or merger. All of these events compel executive management to reduce expenses by the quickest way they can: headcount reduction.

A company's payroll is its biggest expense. When the economic climate changes for a company, through merger, business downturn or poor management, the worker-bees are the first to go. An entire company can be let go before the CEO is cut loose by the Board of Directors. It's the way things work.

What usually happens after a RIF is that fewer people do the work that more people did in the past. This leads to working more hours to get the job done. In the case of most white-collar workers, this means doing more work for your existing salary. Overtime hours are not compensated and therein lies the rub.

When you demand that your employees work more hours without additional pay, you're creating an environment of stress. Stressed-out employees look for ways to reduce their stress and, typically, search for new jobs. A happy employee does not look for a new job. An unhappy employee does look for a new job and, in most cases, finds one.

Executive management has a very thin line to walk. You can reduce your workforce, but you stand to lose your remaining employees to a better, less stressful environment. Many a merger has gone awry when the talent within the acquired seeks a better course.

Government employment has never had to deal with any of this. A government job is security, in labor and in retirement. But retirement benefits alone have brought state and local governments to their knees. How do you pay for a program that was never conceived to exist in an environment of less?

Follow the path of the free-market. You have to make tough decisions, but your ultimate goal is to make due with what you have, which is to say, our tax dollars. If you don't have what you need to "fund" these programs, they need to go.

Why should government employees expect anything more than what they would be given in the free-market? Is there anyone out there to give me a reason?

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