With a weakening economy and increasing cost pressure, many organisations are embarking on restructures and redundancy programs. 

Some organisations have been delaying such “right-sizing” programs as they have suffered the organisational impact of lay-offs in recent years and know, all too well, that they will inevitably need to rehire many of the jobs lost. Unfortunately, the growing pressure to remove cost may ultimately prevent them from riding out the current economic lull.

This cycle is nothing new.

Organisations have long been scaling up through recruitment costs and, at times, inflated, fixed salaries due to competition for in-demand talent. They then scale back through right-sizing programs.

As we watch the cycle kick off again, with major corporations like Telstra and PWC cutting jobs, the question arises: is it time to start “right-shaping” our organisations, instead of just “right-sizing”?

What is right-sizing?

Right-sizing is a term used during restructure and redundancy programs where jobs are eliminated and “permanent” employees are exited from an organisation. This may be driven by a need to better align the organisation design with the strategic agenda but is often a headcount-out, cost-out exercise.

The cost of right-sizing and redundancy

Organisations frequently resort to redundancy programs, which carry both a financial and cultural cost. The financial cost of a redundancy program can be substantial, including severance, legal fees, and potential loss of productivity. When executed poorly, these programs also lead to decreased employee morale and engagement, and even when executed well, can have an impact on the organisational culture and retention of top talent.

What is right-shaping?

Right-shaping an organisation starts to consider the very design of the organisation and workforce shape rather than simply culling jobs. This approach challenges leaders to consider how they can design a more nimble, sustainable organisation that is fit-for-purpose in this dynamic environment. Right-shaping introduces the concept of a blended, variable workforce comprising core teams (employees) and talent benches (on-demand talent). 

Core teams consist of employees who:

• Deliver “always on” work or are transferable across projects
• Provide the must-have capabilities
• Cover base-level capacity 
• Focus on on-going needs or re-pointed to projects

Talent benches consist of on-demand talent (i.e. independent talent, freelancers) who:

• Step in when the team needs to flex up
• Have specialist capabilities that are needed some of the time
• Can upskill core team members
• Focus on short-term deliverables

The benefits of right-shaping:

Reshaping your organisation design and enabling a blended workforce has a number of benefits:

• Easier to flex up in peaks and flex down in troughs
• Less cyclical redundancy costs and cultural impact
• Access to diverse skills and perspectives
• Better workload management and improved wellbeing
• Less big consulting spend
• Access to talent who work outside the traditional employment model

Hayley Eames, General Manager – Workforce Design and Supply at Healthscope,  agrees:

“Being able to flex your organisation up and down in an intentional, strategic way is a much needed shift. The way that leaders design work must reflect the constantly disrupted environment that all organisations are operating in as well as the changing way that people want to work.”

How to right-shape

Leaders must start questioning not only the size of their organisation but the shape of their organisation. They need to identify which organisational capabilities are best designed into jobs and delivered by employees and which elements are best delivered, at least in part, by on-demand talent as gigs. 

This can be done at an organisational level or by simply upskilling and empowering leaders to create blended teams and be strategic with their workforce spend.

Blended workforce design also impacts how talent is accessed as on-demand talent are not accessible via traditional recruitment processes. Organisations need to create communities and benches of on-demand talent that are known, trusted and accessible or tap into platforms such as Werkling who can manage their talent bench. 

Right-shaping your organisation is essential for creating a sustainable, high performing workforce and staying competitive in today’s dynamic business environment. By creating a more strategically nimble workforce and leveraging on-demand talent, leaders are breaking out of the costly right-sizing cycle and create an environment where workforce augmentation is intentional and strategic.

To learn more about Werkling, head here, or contact us directly at hello@werkling.com.