What Exactly Is ‘Right-Sizing’?

Right-sizing sounds a lot like downsizing, but there is a surprising difference. 1  

Most people know what the word "downsizing" means … job cuts. Layoffs. People without work. So if downsizing means releasing employees, what does "right-sizing" mean?

 

Some companies euphemistically call downsizing right-sizing because it helps them size their workforce according to the amount of business they’re currently generating. The staff-to-work ratio is deemed "right" and the workforce is the "right size" for the firm. 2

 

A more charitable and optimistic interpretation of right-sizing is also called flexible right-sizing. Flexible right-sizing means providing alternative work arrangements to employees instead of laying them off or downsizing. This method helps firms scale down or up, depending on the demand for their products or services, without losing valuable employees. 3

 

In companies using right-sizing models, a variety of options are offered to full-time employees who may otherwise have their jobs terminated. Employees may be offered:

 

• Sabbaticals — unpaid time off. Sabbaticals or furloughs may be offered to skilled workers who would be difficult to replace and for employees of seasonal businesses who reasonably anticipate that the slowdown in work may be temporary.
• Telework — allowing employees to work from home. Some companies find that by allowing more employees work-from-home arrangements, they can shift to smaller offices, and save on leases and related expenses without sacrificing productivity. In fact, productivity may go up!
• Reduced workweeks — reducing the number of days worked per week. Reduced work weeks may shift some full-time employees to part-time hours, or may decrease part- time hours.
• Job sharing — two employees share one available slot. Job sharing may also coincide with flextime, in which employees work flexible hours according to their availability and job needs.

 

Companies know that downsizing can be a hardship for many families. By offering flexible right-sizing, they hope to soften the blow. In some cases, it’s enough to keep benefits and income for a family until the economy picks up and work increases. It’s a compassionate way to run a business without sacrificing profits.

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When you need Financial Consulting to help you make the Correct “Fit”, you may contact Daniel Morris directly:

 

Daniel Morris
707 SW Washington St., Suite 1100
Portland, Oregon 97205
 
503.749.6300 – Portland Office
408.292.2892 – San Jose Office

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