RIFs – Through the lens of a C-Level Executive, and how to understand that they can benefit you as an individual.

Big picture:

There are around 209 million working adults in the US (people aged 15-64) and between 4-5% of these people work in Financial Services, 1 in every 20 people work for a bank, fintech, wealth manager or a firm associated with this industry!

In an “average” year there could be anywhere from 5 – 20 million people affected across the US from a RIF (reduction in force), and in the financial services industry last year we saw over 20,000 jobs cut in banking alone… a large portion came from the “big banks” and for reasons, whether a reliance on the mortgage industry, which was impacted by increased interest rates, the pending recession, deal making was down in the Investment Banking space and we continue to see technology improvements especially in automation and with AI, which will have a lasting impact on employment.

There are around 9,000 fintechs in the US, of which only 25% make it past the first few years, hence a lot of people join this space, to eventually find that they’re back on the job market within a few months.

So why, with the constant “threat of RIFs” do people not openly talk about this being a realistic reason why your job may be impacted, either directly or indirectly?

As a Recruiter I always want to find out what someone’s push and pull factors are, from a high level this means:

Push factors: The reasons someone feels like they are being pushed away from their current position, i.e: changes to their current role, changes to their working set up, like “going back 5 days, but I want to be hybrid or fully remote”.

Pull factors: Reasons another opportunity could pull them in, i.e: higher pay, added responsibilities and career advancements, looking to relocate etc

The one item that falls definitively into both categories is RIF! For those still at a company, a RIF makes people feel uneasy about their job security as they’ve likely been given added responsibility or an increased workload, typically without a salary increase – which they are likely afraid to ask for, for fear of losing their job. A RIF, especially at a smaller company puts everyone on edge and they assume it’ll come round again, and they want to jump to avoid being in this situation. A RIF is also the reason that people see other companies as “more stable” and sense that the grass is simply greener on the other side. In the modern day, we see company RIF numbers within minutes of the staff impacted, on LinkedIn or X.

What should I do after a RIF?

I have personally made career decisions based on a RIF, many RIFs in fact and it definitely contributed to me wanting to set up my own business last year, it was not the only factor of course but it contributed. I have first hand experience in seeing how letting go of some staff can have a very negative impact on those left behind (the people who did not lose their jobs), and want to do everything I can, to avoid being in this situation again. I have leaned on the advice from a few senior connections in the Risk & Compliance industry, and who’ve been impacted by RIFs throughout their careers too, to help those who are now unsure as to how to react to this although common, very challenging professional predicament.

Stephen Cheng is an accomplished C-level executive, and has worked at public and private financial institutions for many years. He has held many roles across Risk & Compliance and has seen 6 RIFs previously and has personally impacted himself too. In one RIF he was promoted into a more senior role and felt the support of leadership as this business looked to continue to grow through restructuring, so he has seen how this process can genuinely benefit individual careers, if you allow it to.

When I asked Stephen what his advice to those who are kept on during a RIF was he broke down his response in to these areas:

• Consider how the changed circumstances align with your personal and professional objectives, and if they’re not aligned and you don’t see the possibility of positive change, then you should explore other opportunities internally or externally.
• It is important to focus on what you can control and identify new opportunities to contribute and grow.

Stephen shared that his personal strategy to retain the best employees, after a company-wide RIF is to; “Ground and unify remaining team members with a meaningful purpose by being transparent about the circumstances to all relevant stakeholders and empower the remaining talent to become a voice on how to foster a more positive environment.”

I appreciate these tips and firmly agree that it is your career, so you have to stay focussed on yourself in a situation which is likely out of your control and try to adjust to the “new normal” as quickly as you can. I have always been told that a company wants you for your best skills and attitude, the moment they see either waning they may make the decision to let you go. Equally my dad taught me to always do what is best for me, if a company is not meeting my expectations or ambitions then it could be time to move on. Your career decisions are not always completely in your control, but when they are it is important to do what is best in that moment, with an eye on what will be best in the short and long term.

Another individual I met with was Nancy Schicker, who was recently the BSA Officer for City National Bank out here in Southern California, Nancy has worked in the Financial Services industry now for about 30 years. She shared that at some point in time, every single company she’s worked for has gone through a RIF, and on many occasions she was the one having to tell others that they were leaving. Although she too, has been impacted directly herself and Nancy openly shared that “making decisions to let staff go is one of the hardest decisions a manager has to make. Also understanding that the staff that are not laid off are affected as workloads have to be reallocated and these workers already have heavy case volumes. Morale suffers; productivity declines, and staff may voluntarily resign or may even silently resign. Even when layoffs are not directly affecting a department, staff across the organization worry ‘they could be next’. It’s a major disruptor.” I agree with these points so much and as a leader have sometimes underestimated the impact that personal connections can have on morale, it can be impossible to really know the dynamic of staff, like the friendships made out of work, even family ties who work for the same company. Letting go of 1 person from the Sales team may not sound like an issue, but if their closest connection is a Finance worker, this may result in issues in that team, there really is a whole world of connection to employees, especially at large companies!

When asked what her advice is to those who are kept on during a RIF Nancy shared “Stay flexible and open to learning new skills. Continue to hone existing skills to stay current with industry changes. remain curious. Good AML people are like diamonds – in the right conditions and with the right leadership they shine.” I also asked her what she would make of a potential candidate who has made it clear that part of the reason they are looking to move is due to a RIF at their company, she shared “Getting laid off can happen to anyone at any time in their career. My advice to someone I may be interviewing is to put the event behind you and keep moving forward. Find the right role within financial services that is right for you. We cannot control what events may happen in the future, we can only control our responses to it.“

Clearly it shows that RIFs can be as hard for managers as those employees who sit below them and I think that we forget about the challenges put in front of leaders who need to make decisions on the employment status of others, in many cases with minimal notice. I will reiterate again, you can’t control every scenario, especially when a RIF happens. Most business decisions are more calculated and thought out than staff assume and CEOs are humans at the end of the day too, as are Managers most people in their career will likely see both sides to a RIF, for better or worse.

Final words:

Stephen told me that his advice to anyone who has experienced a RIF at their current business would be “to consider how circumstances align with your personal and professional objectives, focus on what you can control and new opportunities to contribute and grow, including developing new skills and experience. It is important to be empathetic in collaborating across the organization, especially if you’re in a leadership role, or if this is something you see in your future.”

Nancy added if you are looking for a new role, and have been impacted by a RIF that “you should reach out to your network, recruiters, family and friends for introductions, to help with mock interviews, resume reviews, or brainstorm on new roles.”

RIFs can affect everyone associated with the company, current, former staff and the families of these people. Like any struggle in life, it is important to lean on those closest to you, you may be surprised who has had a similar experience, and equally those around your industry who can help, whether you want to move on or stay.

Everyone’s career is their own. Sometimes a bad situation can help to shape us, whether or not we know it at the time.

With thanks to: