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Is Your Business Overstaffed or Understaffed?

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There are many dilemmas that a business could have, but two in particular can be very problematic. First, a business may have more employees than what is needed. This results in employees being paid to do nothing. Second, a business may have fewer employees than what is needed. This results in poor customer service. A business that doesn’t understand how to deal with being overstaffed or understaffed is not working in the right direction.

Why Being Overstaffed is Bad for Business

Overstaffing often happens when a business experiences a sudden boom that is followed by a sudden decline. Some companies see the need to hire additional workers during their peak season, but they often commit to the mistake of hiring regular employees. Thus, when lean season comes, they have more workers than needed to handle the limited work. Overstaffing can lead to bankruptcy because of wasted money on wages.

Why Being Understaffed is Bad for Business

On the other hand, understaffing could result in low customer satisfaction. For instance, if you have three guests in urgent need of help at reception and you only have one reception staff, you may end up with negative feedback from the other two guests. In the long run, this may greatly affect your overall customer satisfaction and could decrease customer retention.

How to Monitor Overstaffing and Understaffing

Now, how would you know if your business is overstaffed or understaffed? Here are some of the situations that you may encounter:

  1. Your business is understaffed if tasks that need to be completed remain unfinished because there is not enough staff available to take care of them.
  2. Your business is overstaffed if you hired too many workers, if you give too many workers shifts when work forecast is low, and if there is no increase in productivity.

How to Handle Being Overstaffed or Understaffed

To deal with these problems, here are some quick tips you can consider:

  1. Take note of peak seasons, peak hours, slow hours, and lean seasons.
  2. Provide your employees with time off, schedule preferences, and even a list of holidays for them to note.
  3. Distribute schedules in advance to make sure conflicting schedules can be easily fixed.
  4. Provide a group of on-call people who can be easily contacted in case you need additional help at work.

TimeForge can save you time and money, and help you understand how to handle overstaffing and understaffing situations. For example, our software can help you enforce your labor to sales ratio. Sign up for a free trial now!

If you thought these tips were useful, check out our store manager quick tips.

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