Three Ways Understaffing Damages Business

help wanted (002)

The pandemic left many Americans unemployed and desperate for a job.  But just over one year later, data shows that there are currently over ten million open jobs (Trading Economics). Help wanted signs, frazzled waiters, and long lines at grocery stores tell the tale of businesses desperate for help.

Where are the workers?

Many feel that the post-pandemic staffing shortage is due to

1) workers’ fear of contracting Covid-19

2) a lack of affordable childcare (some parents choosing to homeschool and opt out of the job market)

3) attractive unemployment benefits

4) some choosing early retirement after benefitting from rising home prices

Understaffing is also due to business owners’ fears of over hiring in an economy that remains unstable because of Covid variants.

Employed workers are left feeling the pinch.  In fact, according to a recent Gallup poll, four out of every ten workers in America believe that their company is understaffed, while relatively few believe that overstaffing is a problem their company faces.

Understaffing damages business by increasing employee stress and decreasing customer satisfaction. What should businesses do to solve the problem?

Understaffing Damage #1: Employee Stress and Morale

As employee workload increases, so does employee stress. A recent press release published by PR Web summarizes the problem perfectly: “Inadequate staffing is a principal contributor to job-related stress, which is, in turn, a principal factor in turnover. Employees in understaffed organizations can lack a sense of control over their rapidly increasing workload. This hectic environment can lead to poor work performance and can be detrimental to the organization as a whole.”

With more work than one person can handle, employees run the risk of missing deadlines which can lead to increased expenses for a company. Employee morale suffers as employees feel undervalued and overworked.

Chronically understaffed companies can experience higher incidences of workplace accidents. As individual workers in an understaffed facility put in extra hours, over-tiredness, high stress levels, and physical exhaustion will likely set in. Tired and distracted employees not only are less productive, but also more prone to workplace injuries that can drive up workers’ compensation costs.

Understaffing Damage #2: Employee Turnover

Employees who reach their breaking point may choose to leave their job which can be very costly for a business.  According to a recent analysis, “every time a business replaces a salaried employee, it costs 6 to 9 months’ salary, on average. For a manager making $60,000 a year, that’s $30,000 to $45,000 in recruiting and training expenses.”

By ensuring that your business is properly staffed, you can lower the risk of employee turnover. This will allow your business to not only avoid the costs of turnover, but also develop long-standing relationships with your best employees.

Understaffing Damage #3:  Customers Suffer

Customers may take their business elsewhere if they are kept waiting or if their time is wasted due to a mistake.  Customers may also pick up on the low morale of the employees with whom they are interacting, and this can damage a brand’s reputation.

What Can Businesses Do?

Therefore, businesses must make appropriate staffing a priority. To attract employees, publicly traded companies including Costco, Chipotle, and McDonalds announced wage increases (MSN).  To improve staffing at warehouses, Amazon, Walmart, Dollar Tree, and other retailers offer signing bonuses and improved tuition reimbursement packages (CNN Business).

To help advertise openings, companies are asking their current, overworked employees to reach out to their own networks.  Some businesses are offering remote work options and are considering freelance workers to ease stress.

Businesses can also partner with a recruiting company.  We at Artemis Consultants believe that this year is the single most challenging recruiting environment we have experienced in 25 years. To find the best talent for your open positions, it is important to have a recruiting partner that knows how to conduct comprehensive searches.

Artemis Consultants will not let understaffing damage your business.

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