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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

Once you’ve analyzed your monthly sales volume, you can begin analyzing your employee situation. How can you best staff your organization to meet your “average” demand per month? If your employee count is built toward an average level of sales, then you should be able to handle a higher sales month through overtime and even weekend shifts.

Typically, a high sales month is characteristic of a few rather crazy weeks – which you can manage with an “all-hands-on-deck” approach. Of course, with significant overtime needed to meet these higher demands, your labor costs will go up. But such costs will always be less than staffing your organization year-round to meet the highest levels of sales; this likely will only happen four or five months out of the year. With an average level of staff, any excess capacity will be much less burdensome on your business when you encounter a low sales month.

Shift management is another tool that can be used to manage extra work. For example, when we’re running two eight-hour shifts in our print room and business picks up for a few weeks, we’ll stretch a few of the swing-shift operators into the first four hours of the night shift (alternating employees to avoid excess fatigue). And then we’ll bring a few of the day-shift operators in four hours earlier in the morning, effectively opening up a full night shift without hiring additional employees. But be cautious: This strategy typically works only as a temporary situation; otherwise, your operators will quickly burn out working consistent 12-hour shifts.

Cross-train for bottlenecks
Another very valuable way to manage higher volumes of sales is by cross-training your employees. We often find that certain areas of our business become much busier during high sales months than other areas. By identifying these bottleneck areas in advance, you can cross-train some of your people to step in and help where needed. This can prevent the need to hire additional personnel to compensate for those bottleneck job functions that occur during busy times.

The challenges we all face with cyclical sales is a critical one. But simply ignoring the problem is not the answer – doing so can become very costly to your business. Instead, pay attention to your markets and adjust costs, including staff sizes, to match your revenue streams. Apply a constant diligence to your business environment and you’ll avoid major financial losses in those low-volume months we all would prefer to avoid.