Downsizing within a corporation is sometimes unavoidable. External forces may create a situation in which a corporation has no choice but to cut labor costs and reduce employee headcount. According to an article by Growth Strategy Consultant, Aldonna Ambler, companies can potentially avoid the negative effects of downsizing by proactively “rightsizing” throughout the year.
How does a company rightsize, and how is this different from downsizing? Downsizing is typically a reactive solution that is disruptive and destructive to a corporation. Downsizing involves a planned, often large layoff in order to cut costs. In contrast, rightsizing is a proactive, creative, and ongoing process of evolving and adapting in order to identify the most effective shape and size of a corporation. Rightsizing is an intentional, forward-looking strategy that aligns with company goals and provides direction for new hires, as well as current employees who may want to learn new skills. The organization may be restructured in order to maximize profitability and remain competitive in the market. If companies do not consistently rightsize, they will be forced to downsize which can create a sense of helplessness for managers, and low morale for employees.
Downsizing – Reactive, Destructive, Disruptive, Result of Past Events, Takes Place at a Specific Time, Unintentional
Rightsizing – Proactive, Creative, Intentional, Future-looking, Ongoing, Dynamic
In both rightsizing and downsizing, the need to adapt quickly to new office space requirements is paramount. Preferred Office Network’s No-Term lease agreement makes this possible, giving your company the ability to vacate space with a 60-day notice and avoid being stuck with a lease that is no longer utilized. Preferred’s flexible space solutions provide cost savings and fit well with the adaptable nature of the rightsizing strategy.