Rightsizing is the process of restructuring an organization to meet business objectives and revenue goals and to increase overall efficiency of the business. The process usually entails a reduction of employees, a restructuring of management, and onboarding new talent. It can also include redefining job descriptions and creating new roles.
A company should consider rightsizing for the following reasons:
There has been a change in business objectives that require a shift within the organization.
2. There are skills gaps in your company that need to be fulfilled.
3. Your current workforce is not supporting your business objectives or hitting necessary metrics required for your company’s success.
While the process of rightsizing may sound similar to downsizing, the two are very different. As we have gone over, rightsizing occurs in order to meet business objectives and increase overall efficiency. Rightsizing could take months, or sometimes even years. Companies that are focusing on rightsizing want to take time finding the right talent to fill their gaps, and they want to shift the company’s mindset to align with their new goals. Rightsizing could even result in more employees over time.
Downsizing, on the other hand, is the act of reducing costs within a company in order to maintain a profit. Downsizing occurs out of necessity, and can actually result in losing some talented employees as a result.
Rightsizing is intended to add many benefits to your organization. These can include:
Better talent. Through rightsizing, an employer will eliminate employees who are not benefiting their organization and can also focus on hiring to fill in any skills gaps.
So—we’ve gone over a number of benefits. But, as always, there are risks that an organization can encounter during the process of rightsizing.
Some of these risks can include:
If you are aware of the risks that coincide with rightsizing, you can properly prepare for them. Rightsizing requires a smart approach and careful actions, but it can ultimately be the savior for your organization.
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