Mitrefinch logo

Staff shortages: What they are, why they happen, and what you can do about it

Published: January 28, 2016

Skill shortage… Labor shortage… Staff shortage… These terms are often used interchangeably, but do they always mean the same thing? Not quite!

Employers may find themselves facing a skill shortage when there are not enough people with a particular skill to meet their demand at a certain point in time. Skills shortages tend to be categorized as resulting from internal factors, or external factors. Internal factors can be shortages caused by recruitment and retention issues. Perhaps there are plenty of skilled workers in the market, but the company is not providing suitable pay or working conditions. The external factors might mean an employer is having trouble filling a job vacancy, or keeping skilled staff because there are not enough job seekers in the market with the required skills. For example, a natural disaster like a flood might result in a dearth of carpenters, plumbers, electricians and carpet cleaners for a labor hire company for months and months.

Skill shortage is not to be confused with an economic labor shortage. This is a more macro-economic term, meaning there are simply not enough workers available. Labor shortages tend to happen alongside low national unemployment levels, and can impact all industries.

In contrast, a staff shortage (understaffing) is something that can be experienced in the course of running a business and arranging shifts and schedules. It is often avoidable by getting a better grip on staff planning in line with business strategy, peak times, and other business factors. A business experiencing a staff shortage might have enough staff to handle their business needs during normal times but things like sales peaks and annual leave can potentially tip you into shortage. This can result in scheduled staff being overworked, reducing quality and productivity and surging overtime payments.

Avoid the perils associated with understaffing and overstaffing with better shifts, schedules, planning and forecasting. Contact Mitrefinch for more information.

Don't waste time

Empower your teams with integrated Time and Attendance and HR solutions