top of page

What is right sizing and what are the key steps & challenges involved?

As your business grows, it's important to make sure that your workforce is adequately equipped to handle the demands of the marketplace. That might mean downsizing in some instances and rightsizing in others. In this blog post, we'll take a look at five key steps and challenges involved in rightsizing a workforce.

What is rightsizing?

Rightsizing is the process of determining the optimal size and composition of a workforce. In order to rightsize effectively, businesses need to consider a number of factors, including market demand, organizational structure, and financial resources. The goal is to ensure that the workforce is neither too large nor too small for the current needs of the business.

1. Conduct a Market Demand Analysis

The first step in rightsizing your workforce is to conduct a market demand analysis. This will help you understand the potential size of the market for your product or service and how that might change in the future. It will also give you a sense of how much capacity you'll need to meet that demand.

This information will be critical in determining the optimal size for your workforce.

Keep Reading: Onboarding costs for new employees

2. Analyze Your Organizational Structure

After conducting a market demand analysis, you then need to analyze your organizational structure. This will help you understand where there are redundancies or gaps in your current workforce. It will also give you a sense of how flexible your organization is and how quickly it can adapt to changes in the market.

This information will be critical in determining how to best reconfigure your workforce.

Keep Reading: 5 non-traditional employee benefits

3. Review Your Financial Resources

Next up, you should review your financial resources. This will help you understand what you can afford to pay your employees and what type of benefits you can offer them. It will also give you a sense of what kind of financial impact any changes to your workforce might have on your business.

This information will be critical in determining how best to allocate your resources when rightsizing your workforce.

Keep Reading: What is an open door philosophy?

4. Make the Necessary Changes

Afterwards, it’s time to make the necessary changes to your workforce. This might involve reducing headcount, eliminating positions, or redeploying employees to other parts of the organization. It's important to take into account all of the information you've gathered in the previous steps when making these changes.

Keep Reading: Important HR metrics your business should be tracking

5. Monitor and Adjust as Needed

The fifth and final step is to monitor and adjust as needed. This involves periodically reviewing your market demand, organizational structure, and financial resources and making adjustments to your workforce as necessary. It's important to stay flexible and be prepared to make changes as the need arises.

Keep Reading: Key signs an employee is about to quit

Key challenges with rightsizing a workforce

There are a number of challenges that you may face when rightsizing your workforce.

One challenge to keep in mind is ensuring that you maintain enough staff to keep operations running smoothly. You’ll want to be careful not to over- or undershoot your needs, as this can lead to serious complications down the road.

Another serious challenge is dealing with the potential negative impact on employee morale. If workers feel like they're being asked to do more with less, it can lead to feelings of frustration and resentment. Additionally, if you're not careful throughout the process, downsizing can lower morale and create an atmosphere of distrust among your employees.

Rightsizing can be a complex process, but by following these five steps, you can ensure that you have an adequate workforce that is properly equipped to handle the demands of the marketplace.

bottom of page