When you think about staffing challenges, an under-staffed team is likely the first problem that comes to mind. But overstaffing is also a challenge, and it is more common than you might think. Companies often ramp up staff when demand is high, but if that demand suddenly drops off, a number of employees find themselves with nothing to do, driving up salary budgets and eating into the bottom line.
If you are faced with this problem, here are some solutions for handling overstaffing.
Reallocating resources can be a good way to keep great employees on staff and control costs. If you can move engineers and technical people to new teams who need help, it avoids less pleasant measures and saves recruiting and training costs because those employees already know the ropes.
Cutting work hours can help control salary budgets. Managers might cut hours on specific days or for specific job titles. It’s a great idea to ask for volunteers to cut back hours first. Morale can suffer if people find their hours cut but they are the sole breadwinner for their family or they are in a financial struggle. Asking for volunteers allows people with more flexibility to step forward and shield their coworkers from potential hardship.
Letting people go is never easy, but there are times when companies have no choice but to conduct layoffs due to overstaffing. This solution is almost always the last option when hour reductions and other strategies simply do not work.
Hire Contract Employees When Demand Rises
One of the best ways to hedge against the unpleasantness that comes with overstaffing is to hire contract professionals when demand rises. Leveraging highly-skilled people for specific projects helps to control costs and when the project ends, the contractors move on. If needs change during the contract period, it is a lot easier to let a temporary employee go than a permanent staff member, and exposes the company to less liability.