Stop Over Staffing And Reduce Small Business Overheads. Here’s How To Do It.
Over Staffing and Inflated Overheads
If you want to reduce overheads in your small business, preventing over staffing is a great start.
It’s easy for businesses to employ too many staff. There can be lots of reasons it happens. You might have employed someone because they have a certain skill, but it turns out there isn’t really enough work for them for 40 hours a week.
You might be in a highly seasonal business that means you need a lot of staff over summer, but they have nothing to do in the winter.
It could be that you’ve got a few staff members who’ve been with you for years who don’t fit into your new business model, but it’s hard to let go of them.
While it’s easy for businesses to get into a position of over staffing, it can be hard to get back out of it – but over staffing is something every business should address.
The obvious reason is that you’ll simply be spending too much on salaries, but there are also other problems over staffing can cause.
Productivity on an individual level can decline as a result of over staffing as people fall into the habit of not having enough work to do. When some work does come along, the staff member might be reluctant to do it instead of carrying on their normal routine of chatting through a light work load.
Similarly customer service could actually suffer as a result of over staffing as people assume it’s someone else’s job to resolve the customer’s issue and not theirs.
Whether it’s saving money or improving the quality of the work that you do, getting over staffing under control is an important step.
Here’s how you know when you’re over staffed and what you can do about it.
Signs You’re Employing Too Many Staff
When it comes to having too many staff, there are some sure fire signs you should be looking out for.
Surveys have discovered that only 50% of employees know what is expected of them. This can be an even bigger problem in businesses that are heavily over staffed. When there are too many people working in a business there often isn’t enough work to go round.
This can result in staff repeatedly having to go an find their manager to ask what they’re meant to be doing next.
While this might not sound like too big of a problem, it can actually be very demoralising for staff as they don’t feel like they’re adding much value with the work that they’re doing.
However, staff not knowing what they’re doing isn’t to be confused with staff wearing many different hats because there’s plenty to do.
In small businesses and start ups it’s perfectly normal for someone to have a number of different jobs in the business, making it hard to give them one fixed title. This is a positive thing as it shows you have a hard working and multi-talented staff member.
If however a staff member doesn’t have a specific job title because there isn’t really anything for them to do, there’s a good chance your business is over staffed.
Too Much Time Online
One of the big differences in office life over the last few years is the arrival of the internet and smartphones.
Where once upon a time it might have been obvious if a staff member didn’t have any work to do, today they can easily sit quietly at their desk browsing the internet and you would be none the wiser.
While there will always be times people need a break from work and have a quick browse of the news sites, if surfing the net becomes a big problem in your business it might be that you are over staffed.
Generally, most people have a decent work ethic, so if there is work they should be doing they will probably do it.
If people are spending hours a day browsing online then there probably isn’t enough work to go around the office.
Struggling with retention
While it might sound nice to go to work and get paid without having to really do any work, the reality is that having no proper role in a business can make people unsatisfied and unhappy at work.
The UK average employee turnover rate is approximately 15% a year. If yours is significantly higher than that, it might be the case that you are over staffed.
While there may be other reasons that people are unhappy and looking for work elsewhere, it’s certainly worth asking staff who are leaving why they’re going. If time and again you’re hearing that they’re bored at work, chances are you’re over staffed.
Reduce Overheads and Employ Fewer Staff
If you’ve looked at your business and realised you’re over staffed it’s time to take action. But where to start?
It’s important to take the right steps to reduce over staffing to make sure you don’t lose valuable skills and experience from the business, or even to go to far and end up under staffed.
Here are some steps you can take.
Look closely at how your business operates
The first step to tackling over staffing is to look at how your business works. It could be the case that you’re over staffed due to a fundamental misunderstanding about how your business runs.
For example, look at your sales history. It could turn out that there is actually a great deal of seasonality to your business even if you’re not in a particularly seasonal industry.
If you provide services, look at which service is selling the most. It might be the case that you’re over staffed in one area and understaffed in another because you made assumptions about which are the key services you provide.
By taking a step back and looking at your business on a macro level, rather than focussing on the micro interactions that go on day to day, you might be able to see some overarching patterns that help to explain why your over staffing problem is happening.
Once you know what your business is really doing you can look at the jobs your staff are doing.
Are all of the jobs they’re meant to be doing actually required by the business? Does the work they do actually reflect their job title?
Often if a business is over staffed the amount of work people are doing that is actually specific to their role might be relatively little as there simply isn’t enough to go around.
There might even be some people who don’t have a specific role and just turn up to do general bits and pieces around the business because that’s just what they’ve always done.
Make sure that every job is actually required by the business, and that everyone has something specific to do.
If you’ve got a problem with over staffing it could be due to the fact that despite their not being much actual work to do there are a lot of staff in the business simply to help manage unnecessary and inefficient administrative work.
Look at your processes and see if they require additional people in the business who don’t really add any value.
If they do, make these processes as efficient as possible so you can reduce the number of people who are needed to be employed.
Use Technology Better
It could be the case that there are a lot of people in your business who’ve been there for years and are employed to do a job that simply isn’t required any more.
If your business has been around for 10 years or so look at your administrative processes in areas like HR, finance and accounting and you might find they need a serious over haul to get in line with modern practices.
Find out which jobs can be done programmatically and start the migration over into the 21st century.
How Outsourcing Can Help Reduce Overheads And Over Staffing
If you’re really committed to reducing your spend on salaries and improving efficiencies then you should look towards outsourcing.
There are a number of benefits that outsourcing provides like fewer overheads, a more flexible infrastructure and access to specialists.
Here are some reasons to try outsourcing
Stop doing non-essential tasks
While it might not technically be over staffing, there will definitely be some people you employ who aren’t essential to the business. By that I mean they don’t directly contribute to the end product that your provide to the customer.
For example if you’re a software company anyone who isn’t directly involved in the creation of software isn’t essential. They might be required to keep the business running, but they don’t directly contribute to the end product.
Similarly if you own a garage the receptionist isn’t out there fixing cars.
By outsourcing as many jobs as possible that aren’t directly related to providing your product or service you will make your business more efficient and effective. Your and your staff will be able to dedicate all of your time to being specialists in your field without getting distracted by the day to day running of the business.
Everything from accounting and HR to your reception team and marketing department can be outsourced. While you might not decide to outsource them all it is certainly worth looking in to.
Reduce management structure
When you have lots of staff, you then have to employ more people just to manage them. By outsourcing none essential jobs, you can get your team small enough so that you can manage them yourself.
As managers can typically ask for a higher salary, while actually doing little to generate revenue, being able to remove managers can help you to make a great deal of savings in your business.
Pay-in house specialists better
As outsourcing will allow you to reduce your salary expenditure significantly, you are able to spend more money employing people relating to your specialism.
This could mean employing more of these specialists, or simple being able to pay them more to improve staff satisfaction and make sure people stay at your business.
If you only have a certain amount to spend on staff, it’s better the spend it in your specialism than on general business admins. By outsourcing any admin tasks you have more money to spend in your chosen field.
Find out more with alldayPA
At alldayPA we specialise in providing outsourced telephone answering services that can help you reduce the number of staff you need to employ in house.
By keeping staff focused on what they do best and keeping them away from the phone you can increase everyone’s productivity so you’ll have a clearer picture of exactly how many people you need working for your business.
To find out more about outsourcing your call answering to alldayPA get in touch with us today.