The Hidden Cost of an Understaffed Workforce

The common phrase “do more with less” can be executed successfully in a lot of everyday tasks. However, when you attempt to do more business with fewer employees, there can be serious consequences.

When money is tight, many companies choose to downsize or cut back on staff without realizing the long-term organizational impact. At the end of the day, an understaffed organization bleeds money instead of saving it.

Understaffing negatively affects your ability to meet your customers’ needs, risking harm to your reputation. It also carries several hidden costs, including:

  • Increased Employee Stress. When staff is reduced, existing staff are expected to complete the same amount of work and meet the same expectations with fewer employees. Tackling this amount of responsibility can take a serious toll on these employees, causing workplace morale to nosedive. In fact, a 1997 study found that 60% of employee absences could be traced to psychological problems that were due to job stress. Also worth noting, it is estimated that half of the 550 million working days lost annually in the U.S. from absenteeism are stress-related.
  • Higher Turnover Rates. No matter how great your benefits package or company culture is, burnt out employees are unlikely to stay if they’re overworked. Burned out employees are not loyal employees. After only a few weeks, any extra money earned from overtime begins to lose its luster. As a result, turnover rates often spike when overwhelmed, and dissatisfied workers quit in the face of increased workloads and unrealistic expectations. A high turnover rate is a very expensive problem.
  • Product Quality. When employees are overworked and under pressure, they focus on getting the job done instead of getting the job done right. Attention to detail goes out the window and mistakes happen. These mistakes reduce product quality, cost you money in fixes, and affect your overall reputation. When deadlines are missed and work quality goes downhill, dissatisfied customers are driven to competitors.
  • Missed Opportunities. Companies that struggle to handle their current workloads are rarely able to take on new projects or clients – and if they do, they may be stretched too thin to provide quality results.  Understaffing stunts a company’s growth by diverting energy from innovation to survival. Adding another employee might seem like a lot of overhead, initially, but the expense could be outweighed by the value of increased business capabilities.

Inadequate staffing levels can cost you employees, profits, current customers, and opportunities to grow your business, but it is possible to turn things around by staffing smarter. When you’re already stretched thin, staffing sounds like one more task, but it’s a short-term project with a long-term payout.

At Snelling, staffing is what we do best. We relieve the strain on your workforce by developing a strategic staffing plan to find new talent and make the hires necessary. We’ve been doing it for over 65 years and have a record of success to prove it.

Are you ready to staff smarter and propel your business toward increased growth and profitability? Contact Snelling today to get started.