Rightsizing — What It Is And Why It's Corporate's Favorite New Trend

The latest trend in workforce reduction is rightsizing. For workers, it may sound as terrifying as downsizing — doesn’t it involve layoffs and the elimination of redundancies? — but the concepts are actually different. And, ultimately, rightsizing doesn’t have to mean the end of the world for you.

What is rightsizing?

Rightsizing is the process of reorganizing and restructuring a business. It can involve:

• Reduction in staff

• Reconceptualizing job roles and descriptions

• Reorganization

• Restructuring management and other employee hierarchies

Rightsizing takes a wide view of the organization, considering how the structure impacts the functionality of the business and its procedures. It is an evidence-based approach to managing and governing an organization.

How does it differ from downsizing?

Rightsizing isn’t a euphemism for downsizing, even though it might sound that way. While both approaches seek to cut costs, they employ different strategies.

Downsizing typically occurs during difficult economic circumstances. Businesses cut overall staff in order to weather the storm. Meanwhile, rightsizing is about ensuring that their approach to managing human resources is consistent with their goals. It may not mean an overall reduction in staff — for example, in some cases, businesses might cut certain roles but add new ones at the same time. 

Another distinction is that rightsizing takes place routinely and gradually, in contrast to downsizing, which is a one-time, emergency measure. Typically, downsizing is much more disruptive to the workforce and the entire company.

What’s the purpose of rightsizing?

Rightsizing has the ultimate goal of maximizing profits and making the most of your people and other resources. It also seeks to ensure that you have the best workforce possible and the right people for the job. 

Yes, it involves eliminating redundancies, but it’s also about making certain you have the correct number of people and are equipped for business growth.

Risks of rightsizing.

Of course, rightsizing carries many risks. Laying off employees could very well adversely impact morale and make the employees who stay wonder if they should begin searching for new jobs. It could also affect individual departments and the way personnel interacts with one another. Will employees have enough support? How will the roles and functions change?

In order to make rightsizing a positive step in an organization, leaders must be strategic in their approach. They need to consider the wider impact of the steps they take and ensure that employees understand what’s happening and why. Communication is critical for creating trust. When organizations do lay off employees, they should do so with empathy and offer generous severance packages.

Ultimately, you want a cohesive, engaged workforce and organization. Rightsizing could be the way to make this happen.

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This article reflects the views of the author and not necessarily those of Fairygodboss.

What's your no. 1 piece of advice for those who've recently been rightsized out of a company? Share your answer in the comments to help other Fairygodboss members!