Understaffing Issues in the Workplace

Too many employees drive up overhead and directly affect business profitability. Too few employees limit the ability to serve current customers and grow the business. Understaffing may make sense to the management team but negatively impact the long run. Forecasting staffing needs is an element of strategic planning.

Payroll Costs

Cutting staff immediately reduces payroll and benefits costs, but hiring temporary staff at a premium rate can drive up payroll costs. Replacing temporary workers repeats the costly hire-and-train process. Fewer employees who now have to work overtime can be more expensive than hiring additional full-time staff.

Quality

Product and service quality suffers when fewer employees are available to serve customers and run production lines. Fewer employees must work faster to handle a higher volume of work, and errors increase when quotas are stressed. Poor quality over time diminishes a company’s reputation and drives away customers.

Employee Stress

Increased stress lowers morale and job satisfaction, affects an employee’s mental and physical health, and can increase time off work.

Lost Businesses

An understaffed business misses growth opportunities because it cannot meet customer needs. A company should weigh the cost of an employee against the amount of revenue generated by that employee. Adding another employee at $30,000 a year may seem like a lot of overhead, but the value could outweigh it.