DOWNSIZING — or rightsizing, as the apologists call it — is one of the most painful experiences for employees and management alike. To call it draining would be an understatement. Each part is more painful than the last. What makes it utter chaos is that no method is followed and nobody is trained to run the process well. Most organizations suffer collateral damage in one or more of these ways:
Losing high performers, because there's no clear performance management in place. High performers are well-connected and find other jobs easily; unless it's made clear they're safe, they'll take an offer at the first sign of trouble. The challenge: how do you assure high performers they're safe?
Non-performance across the organization, as panic sets in. Most downsizing runs too fast, like a clean-and-jerk. That inflicts serious injury on the brand, and recovering from low morale takes long. The challenge: arriving at an optimal phasing plan.
Increased risk of business loss. Absence of clear communication plus a demoralized field force makes clients jittery. References dry up, business loss runs deep and long. The challenge: how do you communicate to the market with clarity?
Rehiring trouble. Once burnt, twice shy — it takes a while to restart hiring, recruiters get reluctant, candidates hear the negative sentiment. The challenge: building a sharp manpower plan without repeating mistakes.
Should you be afraid of this path? Should you keep running on high manpower cost instead?
NOT AT ALL.
Downsizing has its pains, but the outcome can be awesome — for the organization and the employees. Workplaces naturally get bloated over time; teams lose sight of their core work and their chance to train. Done well, downsizing forces a refocus on priorities, skills and purpose. It opens up job rotations and new uses of talent. And in the AI era, a lean, well-structured team isn't a cost-cutting outcome — it's the competitive outcome. The businesses that win now are the well-deployed ones, not the heavily-staffed ones.
Here are ideas to help with each challenge:
Assuring high performers they're safe. It helps enormously to already have a performance management program running. Then the team doesn't feel the performance story was invented just to fire people. The best time to begin performance management is when you're not downsizing — so at any point you have a near-ready ranking of staff by performance, and your high performers feel safe.
The phasing plan. Clean-and-jerk isn't the way. Speed doesn't get you through the painful part cleanly — preparation does. There's no sense in one big exercise if you can avoid it. The trick is making frequent small rightsizing a habit, driven by a clear post-appraisal action plan: reward high performers, improve those who can, steer clear of those who can't. Again — the best time to downsize is when you aren't.
Market communication. Both external and internal communication need careful handling. If you've followed the two points above, the market sees this as your usual way of working. Even so, up the frequency with clients, service providers and employees. Mix good business news with the people news. Don't default on commitments. Get the leadership team onto the frontline.
A sharp, low-cost manpower plan. Define roles, required skills, KRAs, and the annual requirement against each role. Evaluate each hire against required skills, surface skill gaps in real time, and train before they become reasons for low performance.
To summarize: build downsizing into your regular performance practice — then it's fair to call it rightsizing. The best way to achieve that regularity is a robust performance management program set up before you're hard-pressed to cut cost. And if high-speed downsizing has already become imminent, you can still prepare and minimize the collateral damage. There's no harm seeking specialists who can think beyond what you can.
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Originally published on the plugHR blog.