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Should you upsize or downsize your business?


The post-Covid, globalized economy will continue to pose numerous challenges to the average business. Depending on your business purpose and strategy, you may need to either upsize or downsize, or consider how you will ensure your company's long-term viability.


When it comes to upsizing or downsizing, there is no standard procedure, and it can occur in a variety of ways depending on the type of business. Some businesses, for example, may combine teams, reduce hours, or even ask employees to retire early. Some companies may even choose to upsize by opening more branches in various locations or creating new products or services.


However, what are the ramifications of scaling up or down your operations? How do you fine-tune your company so that it is fit for purpose and ready to take on your new objectives and goals?


The solution is to examine your forecasting and future decision-making. This article will explore the factors to consider when upsizing or downsizing your team.


What are the factors to consider when upsizing your team?


1. According to Harvard Business Review research, upsizing can improve your employees' creativity, open communication, perception of your company, and overall morale.

Employees may even be encouraged to stay with your company if you upsize due to the benefits of human resource outsourcing. As a business owner, it's critical to remember that well-trained employees who understand your objectives and processes are your most valuable asset. Overall, expanding your business has a positive impact on your employees and can ultimately improve their performance and productivity.



2. Most companies upsize in order to earn more money.

Your company will be able to grow at a faster rate if it has more employees through outsource human resource management and more operational capacity. You may be able to get ahead of your competitors, increasing your long-term potential. Overall, you should try to imagine how your business will look after it has been upsized. If upsizing will help you achieve certain business goals, then it is the right decision.



3. Upsizing not only boosts employee morale, but it can also help your company's public image.

Most people are in favor of upsizing because of the advantages of human resource outsourcing. This is especially true if your company is expanding its workforce through the most effective hiring process. Customers and clients may even believe you have more capacity to serve them effectively now that your operations have grown, after working with a head hunting company. Upsizing can give a positive impression and keep you in the good graces of the public.


Nonetheless, there are some circumstances that may force you to consider downsizing your business.


So, what are the factors to consider when downsizing your team?


1. One of the most effective ways for businesses to cut costs is through downsizing.

Labor is a significant expense for the majority of small business owners. You'll be able to redirect savings into other critical channels if you have fewer employees. Moreover, unlike selling machinery or other assets, laying off employees by learning how to improve the hiring process allows your business to continue operating – albeit on a smaller scale. The same is true for removing specific products or services. Downsizing can help you save money, but it is usually accompanied by a decrease in revenue. You might even unintentionally cut off a major source of profit or growth, or a minor revenue stream that drove customer loyalty.



2. Many business owners view downsizing as an opportunity to restructure and refocus their business operations.

In the midst of all the changes in your business, you may be able to identify areas of weakness or pivot toward long-term goals, with the help of an outsourcing recruitment agency. Some businesses may decide to redirect resources to channels with greater potential. It's also a good time to adjust to changing consumer demands or zero in on a specific niche. While it is true that downsizing provides opportunities for transformation, the unfortunate reality is that it also reduces your company's ability to grow. So, even if you've taken positive steps toward restructuring, the benefits may not outweigh the slowdown caused by downsizing. Rather than a large-scale transition, taking this transition one step at a time may ultimately help you preserve your profits and growth momentum.



3. It is always possible for certain areas of your business to fall through the cracks, no matter how well you manage it.

Perhaps you have too many employees doing the same job, or you don't require such a large retail space. In either case, downsizing will force you to identify and eliminate channels that are not generating revenue. Cost-cutting in certain areas can be beneficial. You may be able to improve your cash flow and reallocate resources to more reliable revenue streams. Unfortunately, this means you won't be able to invest in long-term initiatives that take time to pay off.


Are you thinking about upsizing or downsizing your business? It is entirely up to you as a business owner to decide whether to expand or contract your operations. In fact, the only way to achieve this level of flexibility is to outsource the manpower to a professional manpower outsourcing company. We at Xetron, a Malaysian manpower outsourcing company, can assist you in reviewing your current business plan, running scenarios and forecasts, and determining the best future strategy. Please come and talk to us if you are in the process of evolving or changing your business purpose.


 

We are currently running a promotion in which you can get two talents for the price of one headcount admin fee. The promotion will end on 28th February 2022. So don't wait any longer and sign up now via https://www.xetronsolutions.com/landing-page-for-manpower



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