Staff Balance Blog

Don’t Sweat Your Staff

When a most dedicated and loyal employee resigns because they are over-worked, you know you have a problem. Recession puts extra burden on everyone and that includes employees. The question is: How do you preserve your best people – their experience, their capabilities, and their capacity for work – and at the same time manage your costs?

The aim is to manage costs, while at the same time optimising the valuable staff resources that you have without negatively impacting your business, customers or employee morale.

Companies often use employee redundancy programmes, role amalgamations and do not replace people who retire, resign, or who are on maternity or long-term sick leave, to cut their staff budget – but at what cost?

Suddenly, your best employees are left carrying a heavier workload, doing the work of two people, and coping by working longer shifts. The pressure on staff is compounded by the fact that they are concerned about long-term job security and lower take-home pay.

In an effort to cut costs fast, staff cuts can be made without sufficient information on the impact that they will have – on the business, on the employees and on the customers. So if, for example, the sales team is cut from 20 people to 15. Or a customer services function must run on 40 staff, instead of 50. Or a distribution outlet has three fewer people handling customer orders. Can anyone compute the impact of those cuts on the profitability of the business?

Fortunately, there is a way to understand exactly what impact staff reductions have on your business, your client-base and on your underlying profitability. It is done using simulation modelling techniques – one of the most powerful and most realistic decision-making tools available.

The first step is to determine the staffing levels that you require to conduct your business. Simulation modelling software is used to build a profile of how your staff spend their time. The modelling process takes into account the realistic capacity of your team – stripping out annual leave, sick leave, secondments and so on. Once you have identified a realistic figure for your staff capacity, the next step is to work out the staffing time and unit cost for every process and product.

From there, you are given factual data to help you calibrate your resources structure. Using that model, you can adjust your costs, your structure and your processes.

Making people redundant often results in increased, rather than decreased human resources costs. That’s because fewer people performing the same workload lead to much higher overtime costs, increased levels of sick-leave, and stress issues, as well as a higher level of staff resignations. This is due to the fact that people cannot deal with the amount of work that they are forced to take on.

Importantly, using the simulation model, you have the factual information that you need to prioritise the most lucrative aspects of your business. With confidence, you can focus your resources on the areas that will lead to greater profitability, improved customer satisfaction and importantly, to relieve over-burdened staff.

The great benefit of simulation modelling is that it gives you a detailed picture of the number of staff that you require and a detailed cost-benefit analysis for the team. So you don’t lose your best players, and you don’t sweat your valuable staff.