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Right-Sizing Your Staff

(April 2013) posted on Mon Mar 25, 2013

Adjusting your employee count can have the most dramatic effect on your ability to save money from month to month as sales fluctuate.

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By Marty McGhie

A temp solution
One solution to adjusting your workforce to meet the ebb and flow of sales: the use of temp workers. There are, however, pros and cons to this approach. For example, when you use a temp agency, labor rates will almost always be higher, even for relatively unskilled labor. Also, when using temp labor through an outside company, you never really know what kind of workers you’ll get. Hiring an unknown person can be rather risky when quality and accuracy are critical (and when isn’t this the case?).

The use of temp labor, though, can also be a huge advantage when managing production spikes – even from week to week. Our company takes this approach when managing temp work: Rather than immediately turning to a temp agency, we’ve created our own list of available temp workers through a network of people we know and trust: employees, neighbors, family members, etc.

Often, these are workers who don’t have to work full time (or even part time), but always appreciate the opportunity here and there to earn extra money. Typically, we’ll qualify these workers through initial close supervision. Then we ask the best of these workers to come back to help us out when needed. If someone comes recommended but doesn’t turn out to be the type of employee we desire, we remove them from the list and use someone else. This method has yielded us favorable results over time.

Determining your best staff size
Of course, the use of temp workers can only do so much to help defray the costs of excess labor. Determining the “correct” number of full-time employees that you employ at any given time is critical to managing your labor resources.

Here, I’m referring to regular employees that show up to work every day, no matter how busy or slow you might be. Let’s face it, very few of your full-time employees can afford to come in and work only when your shop is busy and they’re needed. The overwhelming majority relies upon you to pay them a full wage or salary every paycheck. And if they don’t consistently get paid a full paycheck, they’ll likely be moving on to another job soon.