Meaning and need of Rightsizing of the workforce

Rightsizing the workforce means redefining job descriptions and reorganizing employee structures to maintain efficiency and properly equip the company to meet its objectives.

This process doesn’t always entail a net loss of workers. While some employees may be let go to avoid redundancies, new employees may be hired to fill a new gap in expertise.

Methods:

Ratio Analysis

Ratio analysis reveals the financial health of an organization by comparing past financial statements to current records and calculating the change. You can then compare your financial progress with that of competitors and predict how your company may perform in the future.

Activity Analysis

An activity analysis is a study of the amount of time each person spends on their main activities. You’d then compare these results to an employee survey in which they explain what their job duties are meant to be. If there are any discrepancies, like a group of employees completing a plethora of extra tasks, then restructuring might be in order.

Driver analysis

Ratio and activity analysis are both extensions of driver analysis. This strategy investigates the motivations or drives behind people activities. Because any change in these parameters will result in a shift in personnel activities.

For example, the quantity of calls, call flow, service levels demanded, talent required, and so on are all drivers for a call centre. These drivers will supply information on the quantity of people who are truly required in the system.

Mathematical Modelling

This approach is the most difficult of the bunch. Mathematical models are created as part of this process to calculate the exact and precise quantity of workers necessary in the organisation.

Challenges when rightsizing

Redundancy can undermine morale among the employees who are not dismissed, as well as leading to job insecurity this causes high attrition.

If reducing the workforce is not well managed, those who are made redundant may complain bitterly online in forums and social network websites. Newspapers and other media soon pick up on this, and the bad news spreads rapidly. Applicants who are offered jobs in the company may be less keen about joining.

Rightsizing can have a negative effect on a company’s brand image, which makes recruitment and the selection of new resources more difficult. In fact, even sales may be harmed.

Steps involved in rightsizing organizations

1. Conduct structural diagnostics

The first step in the rightsizing process is to perform a thorough examination of the company’s current structure. Understanding the current condition is crucial because you cannot offer appropriate changes, initiatives, and objectives, or rightsizing without first understanding the current situation.

As a result, performing a thorough investigation is critical. It will aid the organization’s understanding of each role’s purpose.

‍2. Identifying key roles of employees

Businesses should also be aware of the goals of each function inside the organisation. The first question any senior management will address is if each role in the organisation is justified. Every position, every title, is linked to a set of precise goals that must be met. 

3. Defining job operational requirements

Prior to beginning the rightsizing process, management will perform a thorough investigation to determine the role-objective fulfilment ratio.  The company will then try to figure out if the individual has the requisite abilities and experience for his position. They will be subjected to a series of interviews before receiving performance scores. 

Organizations must also downsize in order to avoid errors of effort. It is a waste of the organization’s resources if two distinct employees are executing the same task and end up accomplishing more or less the same thing.

4. Adapting to the change as needed

Employees may become anxious and unsure about their place in the organisation when the rightsizing process is applied. This uncertainty may lead to the departure of some high-performing staff, producing even more anxiety among the remaining employees. As a result, the company must comprehend the link between rightsizing and employee retention. 

The ideal strategy is to maintain open lines of communication with your team and keep them informed about the right sizing of workforce. This is to guarantee that there are no misunderstandings or employee assumptions about rightsizing.

Need of Rightsizing:

1. Rightsizing managers know where things are probably headed, which help them in making more effective hiring decisions and provides direction for training/retraining current employees who want to learn new skills to prepare for the future.
2. Rightsizing helps the managers to know their priorities and provides them a better chance to create an organization structure that is conducive to success.
3. Rightsizing helps the management in taking the decision in relation to how many people and efforts are required for any set of activities. It provides the staff profile and resource plan as an outcome i.e. the information regarding how many personnel are required in each area in organization is provided by the rightsizing.