Boise State on Business

Gundars Kaupins: Understaffing might save money but cost sales, morale

Professor of management, College of Business and Economics at Boise State UniversityJune 18, 2014 

Gundars Kaupins.JPG

Gundars Kaupins


Malcolm wants to buy a diamond necklace for his wife. He comes to the jewelry section of the store where there is no attendant available. He presses the "need assistance" button. A haggard staff member appears. Jewelry is purchased.

But Malcolm was disturbed by the staff member's condition. He asks, "Are you feeling well?" The staff member breaks down and says he is overworked. "I have to run three major departments. One staffer from the shoe department is on long-term disability, and another from men's clothing is on a two-week vacation. Overtime topped off with impossible management demands have made everything stressful, not only for me but the rest of the staff here."

Understaffing can be a problem, especially for employees who are overworked and have to be five places at the same time. Job security might be high but stress might be higher.

Employers have motivation to understaff. Cost savings from not hiring too many people seem to make "common sense." In case there is a downturn in sales, layoffs are less likely. Companies can adapt to seasonal downturns with a base of full-time or part-time employees who have some confidence they will stay through downtimes.

Cost savings are common sense? Significant cost increases and revenue losses can occur. Customer service can deteriorate with long lines at the counter and reduced service quality. The quality may plummet because employees are complaining of overwork, high stress and low morale. Where did the customers go? It may take considerable money to replace employees who take sick leave. The cost of handling grievances may increase.

A common way for employers to handle employee shortages is to mandate overtime. Though this is a right of employers, unlimited overtime is not legal. Several Boise-based companies found out the hard way. Unlimited overtime also hurts family life and undoes the work-life balance.

Alternative ways to handle employee shortages from the employer's perspective are to project seasonality and product/service demand in relation to employee requirements. If possible, part-time and seasonal workers can provide more flexibility. The short-term nature of these jobs must be made clear.

Management should listen to employee concerns. Employee and customer opinion surveys are a start. Reports of delayed customer calls, loss of business due to poor service, more sick leave, and greater health problems might indicate workload problems. Management by walking around can help managers obtain on-site personal information. This requires active listening to employees. An employee's behavior and body language must be considered. Ultimately, the employee's concerns must be comprehended, retained and acted upon.

Active listening is the most important skill management needs, according the U. S. Department of Labor's O*NET ( The website describes over 50,000 jobs.

Employees are not helpless in handling understaffing. Clearly communicating to top management what problems are occurring is not enough. Offering suggestions to mutually help the company and the employees may create win-win situations.

I almost forgot a revolutionary way to handle staff shortages: Hire more staff.

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