Intelligent Right-Sizing: Reducing Headcount In A More Sustainable Way

INTRODUCTION TO INTELLIGENT RIGHT-SIZING

The current economic downturn is forcing companies to look hard at their costs. However, unlike previous downturns, and in part because of them, many executives have recognised the need to reduce headcount and costs in a more sustainable manner.

So how does an organisation find the right balance between significant headcount reduction and sustained operational performance? What lessons have we learnt from the last recession?

In previous downturns, many companies have shed headcount in order to reduce costs, with varying results. Those who were most successful were selective in where they targeted headcount reduction, weighing up operational trade-offs between functions and often challenging long standing assumptions around their business. They also considered a wider strategic agenda to the immediate cost reduction demands, allowing informed retention of critical skills, capability and capacity. Costs fell but not at the