Don’t Let Understaffing Kill Your Business

  5 min 3 sec to read

Most managers deliberately try to keep few staffs than actually required in order to cut off cost and widen profit bracket. 

While queuing up in the line of cash counters in a bank or super market, sometimes, the customer’s patience breaks down and results into anger and frustration. This is obviously not a good sign of customer service where business could lose potential customers in the long run. In many cases, this happens when fewer staffs serve for too many people at a particular period of time. This phenomenon is highly linked with the staffing process and cost control mechanism of business organizations.
This phenomenon is not other than understaffing which is a common among every service and manufacturing sector. For stance, in an extremely busy restaurant, most managers create chaos by not specifying the job roles properly to available staffs, except for head chefs. Besides, the hurried and worried staffs that are bound to take heaps of responsibilities instantly without having time to breathe ignite the chaos. Most managers deliberately try to keep few staffs than actually required in order to cut off cost and widen profit bracket. The immediate reason might be, managers are trying to be smart and impress the owners or in some cases they are just trying to copy the market trend. Obviously, lowering staffs might reduce cost; however, neither any manager calculates the resulting profit nor do they think about the long-term scenario of their business.
In another scenario, financial sector are often blamed for providing poor service. It is evident that Nepalese financial sectors are going through the era of merger and acquisition (M&A). The biggest challenge during M&A is employee retention in the newly formed organizations. In many cases the resulting staffs are fired or are compelled to announce voluntary retirement. The scenario is simple as just cutting the staffs that management thinks are unnecessary. However, the down side is that management is losing the experienced staffs. Moreover, lowering staff size could be a sign of failure of not meeting deliberate strategy such as being a best investment banker in the market, being a market leader, expanding a service horizon etc., resulting into adoption of cost reduction approach which again leads to lowering staff size.
Researches show that keeping low number of staffs ruins business in both long and short term. According to, Daily Kos (2014), Walmart went through troublesome period when it lowered down staffs in late 2013. One of the greatest problems it faced was on stock replenishment. Therefore, it can be said that in short term, business could face supply chain problems. One can argue that automated system best replaces labour force but it cannot be assured until its actual impact is seen in the business. Practically, automation just informs about the level of stock required but doesn’t top-up the stocks itself; it has to be done manually. Considerably, lowering staffs might affect the quality and eventually increases the cost in long run. For instance working with small size of front desk staffs in hotel might delay processing the check-in whereas, it is extremely difficult to serve food quickly and maintain the taste and quality at standard level in restaurants where managers create a crew of five or six people for the occupancy of 200 customers. 
Marketing agencies are not aloof from this problem. The possible impact of understaffing in ad agencies might be in the delay in delivering the output such as design in the paper ad, TVCs and BTL materials. As an outcome, clients turn their head towards alternative solution by contracting new deals with the new parties. Therefore, there is more loss than an advantage in keeping few staffs. 
Having said so, lowering staff is absolutely pro-organization but anti-human concept of modern management. Radical structuralists heavily criticize such scenario of redundancies as another mode of dominance by the managers. That might be the reason why labour unions have grown in size and become contentious issue throughout the world. Simply, it can be argued that, there is a constant friction between the owner and the workers and it will continue to grow unless managers try to incorporate the staffs as the essential part of profit making process. Besides, there are a lot of advantages of keeping happy staffs; one being internal marketing.
Internal marketing comes with the happy staff. Imagine a situation where your employee praises his/her job and company and still working off the office hour and location. Actually, they are the best informer of your products and services rather than any ads or leaflets. A research shows that internal marketing motivates the employee and focuses them to be aligned towards company goals. Much can be said about the company success if all the staffs share common vision and values. This view is also supported by the Inc magazine (2014), which reported that happiness comes before success in business organization. The article mentioned that there are numerous advantages of keeping happy employees such as happy customers, higher profits, and most importantly sustainable competitive advantage if the business is in fiercely competitive market. In conclusion, though lowering staffs seems ultimate way of saving costs, it has hazardous impact on the business in the long run. It also invites miserable condition where managers are compelled to work on every aspect of business in absence of key employees. Therefore, if there is increased job absenteeism and higher customer complains accompanied by lower productivity in the business operation, it’s the sign of understaffing. Correct it before it’s too late!
(The writer is a recent graduate from Newcastle Business School, UK and is currently a lecturer of e- commerce in National College, Baluwatar Kathmandu.)

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