How Do Managers Deal with Overstaffing Problems
All managers would love to see their company operating smoothly without any major issues. However, most companies will encounter staffing problems at one time or another. Overstaffing happens when a business experiences a sudden boom that is followed by a sudden decline. The result is employees who are getting paid to do nothing. Overstaffing can lead to serious financial problems and even bankruptcy if too much money is being wasted on wages. As soon as managers identify that overstaffing is a problem in their company, it is important to deal with the situation in a prompt, cost-effective, and professional manner. Here are some things managers can do when overstaffing occurs.
Hire Part-Time or Temp Employees
Fluctuations are inevitable in any business and instead of maintaining a complete staff of full-time employees businesses can instead employ some part-time staff or full-time temps. Both options provide the business with low-cost labor when needed. This way, if there is an unexpected dip in sales these part-time or temp employees can be reduced or eliminated without having to conduct layoffs and pay severance packages.
Reallocate Employees
Moving existing employees to new projects can be effective way of dealing with overstaffing problems. If a certain department is experiencing overstaffing, some of those employees can be moved to a different department that might need more help. This is helpful because existing employees already have knowledge of the business so the company will save money while also increasing productivity.
Furloughs
Another way of dealing with overstaffing is to cut employees’ work hours. Managers might cut hours on specific days of the week or ask employees for voluntary hour reductions. There may be employees who are willing to work reduced hours if you can continue to offer them full-time benefits. This is a great solution for problems with overstaffing without having to fire anyone.
Keep in Mind that it is Temporary
If you plan on growing your business you should keep in mind that the overstaffing will only be temporary. Oftentimes businesses run a lean workforce because they are so afraid of overstaffing but as the business expands so will the demand for more workers. In this case, it would be best to have a group of employees who are already dedicated to the company.
Layoffs
While this is certainly not the most enjoyable solution, there might come a time when companies have no choice but to resort to layoffs to deal with overstaffing. Layoffs are unfortunate but when companies have no other choice they are always a viable option for cutting costs. Because letting employees go is troubling to all employees at the company, layoffs are usually the last option to reduce overstaffing.