Burning @ Both Ends.

• Author: Cutting, Bill
• Position: Brief Article

Avoiding the Negatives of Short Staffing

What happens when a company has too few employees and too much work? Burnout. Experts attribute this productivity-fatal virus to two primary causes: 1) mergers and acquisitions and 2) companies trying to save money by hiring too few workers.

Avoiding the Negatives of Short Saffing

Merging companies typically trim staff where departments overlap. Fact is, exploiting economies of scale is a prime reason for a merger in the first place. Sadly, mergers succeed only 60 percent of the time. And in a 1999 study, Right Management Consultants, a Philadelphia-based outplacement firm, placed the blame for failed mergers on inadequate attention to "the effective use of people."

According to Nancy Garbett, Right's managing principal in Utah, "Companies too often reduce the number of people without reducing the amount of work. The result is a lack of trust between labor and management, and shows up as absenteeism, illness, tardiness, reduced productivity and increased errors."

Garbett cites statistics that indicate understaffing issues can cost a company 250 percent of an employee's salary considering costs to recruit, rehire and retrain. Multiply that by tens or hundreds of workers, and it's easy to see why managers are beginning to rethink the economics of mergers and acquisitions.

Todd Johnson of Johnson Professional Search, a Utah-based recruiting firm, has a different perspective. "The typical scenario," says Johnson, "happens when companies outgrow their staffing size but are unwilling or unable to balance the demand with additional...