An element of strategic planning within an organization is to utilize forecasting to determine staffing needs. This requires looking at current and future needs and aligning a process with business goals.
Otherwise, your organization will suffer from not having enough qualified employees to fill crucial roles. The flipside is not better: You could end up with too many people that you either have to lay off or keep on payroll. Either way, it will cost.
Having too many employees drive up your overhead costs, which pulls down profitability. Having too few employees will limit your organization’s ability to serve customers and grow the business.
Situations That Highlight Understaffing Issues
Initially, your management team might view understaffing as a good thing. However, the long-term impact will soon dispel that line of thinking. Not only are crucial tasks incomplete when there is not enough people on staff, but your organization will encounter other negative issues.
Here are five situations that need immediate attention. Delaying the correction of being understaffed at work can make things more difficult to overcome.
1. High Payroll Costs
One way to immediately reduce payroll and benefit costs is to cut your staffing levels. However, if this leaves departments with too few employees for tasks and projects, you will need to look at alternative staffing options to fill positions sooner rather than later.
This means hiring temporary staff who can come in and begin working. But, this comes at a premium rate that can dramatically increase payroll costs well beyond what you were paying for permanent employees.
You must also factor in the time employees spend training temporary workers and correcting errors. Correcting errors reduces productivity, not to mention when you replace temporary workers it only repeats the hire-and-train process.
Another way to meet deadlines is to have employees work overtime – another costly alternative than hiring additional employees full-time.
2. Low Work Quality
If you want to drive up costs, settle for low quality work where the product and service suffers. A lot of pressure is placed on an understaffed department to work faster.
Five people keeping up with a higher volume of work that is normally performed by 10 results in quotas taking precedent over quality. Your employees are rushed to begin work without training. If training is offered, it is often rushed so work can begin as soon as possible.
Poor quality will diminish your organization’s reputation for delivering quality service. Eventually, this will also drive dissatisfied customers away when deadlines are missed and an overworked staff takes the quality of the work downhill.
3. Employee Stress Increases
Now that deadlines are missed, product quality is poor and customers are going to the competition, employees are stressed. Some may fear losing their jobs, while others simply call off when they accrue sick days.
Increased stress among your employees will lower morale and satisfaction with their job. Existing employees are responsible for an increased workload that may ultimately take a toll on their mental and physical health.
Now, your organization is faced with the cost of sick days and medical coverage. Managers are also stressed with trying to deal with scheduling issues. Additionally, your organization may experience high turnover rates from overwhelmed employees quitting.
4. Missed Growth Opportunities
Inadequate coverage for work shifts can lead to missed opportunities to grow the organization. Even if your management team decides to take on new clients, delivering goods or services becomes nearly impossible. Lost business damages your organization’s industry reputation.
This translates to lost revenue and growth expansion into new markets. Barely handling the current workload because of understaffing issues leaves no room to take on exciting opportunities without correcting what is wrong.
It would be wise to weigh the cost of hiring new employees versus what your organization can lose by remaining stagnant in the industry.
5. Organization is at a Competitive Disadvantage
Consider this: While you are dealing with being short-staffed, your competitors are fully staffed. In some cases, they may have hired the employees who decided to leave your organization.
At any rate, you are now at a disadvantage because the proper number of employees were not in place.
Getting Back on Track
Although you might be short-staffed today, there are ways to get back on track. Think strategically for long-term solutions. Some ideas to consider:
- Note peak seasons and hours versus slow seasons and hours to determine how many employees are needed.
- Give employees schedule preferences, time off and the holiday schedule.
- Distribute advanced schedules so any conflicts can be fixed before the department faces a deadline.
When you have more work than staff, it is important to prioritize projects and tasks. It is also equally important to use skill matrices and other scheduling tools to ensure your organization can meet its goals and objectives.