Getting your staffing mix right

Your staffing cost is pretty much the single biggest cost centre in the vast majority of businesses, so getting the mix wrong can have a huge impact on your profitability.  What you need will vary according to seasonal variations, age and stage of the company, economic climate etc.  Register here  for this month’s free webinar this Friday at 10 am to discuss this in more detail

Seasonal variations
Whether you are quiet over summer, and busy in the winter, or vice versa there are very few companies where work demand is consistent throughout the year.  To a degree, this variation can be absorbed through annual leave.  However, the “Christmas slowdown” seems to have been starting earlier and earlier every year, and finishing later and later.  

So, you need to think about having a mix of full-time, part-time, lower guaranteed and casual employees, to manage the ebb and flow.

Economic Climate
COVID, Cyclones, and now recession.  All have an impact on business and how busy (or quiet) you are.  Sadly, for many downsizing is no longer avoidable (give me a call if this is you, early action can save you significantly in the long run).

Age and Stage of the Company
If you are working hard out to grow the business, often you will need the personnel to deliver to those (potential) new clients before you actually have those clients, so how do you bridge that gap? 

If you are making step changes in the business such as bringing Marketing or HR in-house, or getting a General Manager when you have previously outsourced these things or done them yourself, you will often need a high-level professional to do the initial set-up.  However, once the systems are in place, the day-to-day can be managed by a lower-level or part-time (and cheaper) person.

So, do you need a contractor or fix-term to do the set-up, and then move to an employee as a lower-level permanent position?

Technology changes
2 years ago ChatGPT hadn’t even been released, yet now there are signs of it everywhere, and yes, it is replacing some jobs that were previously done by Humans.  We all need to keep up with technology to ensure that we remain competitive against our competitors, and/or acknowledge that differential and turn that into our Unique Selling Proposition (USP).

What are my options?
I’m running a free webinar on Getting your staffing mix right on Friday 31^st May, 10am… click here to sign up.  I’ll be covering the practicalities in more detail then.  However, here are some quick pointers:

1. Create a permanent workforce to cover your minimum work levels
2. Utilise part-timers, lower guaranteed hours agreements and casuals to “top-up” at busier times
3. Carefully assess if the need for this skill/person is:
   1. A permanent long-term need  – if so then appoint permanently
   2. A temporary top-up is required to get you over a hump? – consider fixed-term or contractors
   3. A specific skill set that you don’t need all the time? – consider contractors.or outsourcing

Contractors are expensive!!
If you pay a (for example) bookkeeper $30 per hour as an employee, then you need to account for another 21.5% on top of that to account for annual leave etc so they cost you $36.45 per hour. With an outsourced bookkeeper you are only paying for the time they are actually doing work for you (usually in 10 to 15 minute increments).  Whereas you are paying an employee for all the time that they are in your office.  So, if that employee is 75% productive (which is actually a very high productivity percentage) then they are actually costing you $48.60 per hour.  If you compare this to $50 per hour for a contract bookkeeper, suddenly you realise the contract bookkeeper is actually not that expensive.

So, if you are considering making the change from outsourcing, to in-house, look at the annualised amount that you are actually paying for that outsourcing, rather than just the hourly rate.

Contractors are usually more efficient because they do this work all the time.  For example, it would take me 10 to 15 minutes to write an invite to a disciplinary meeting.  Even a skilled manager is liable to take over an hour to do the same job.

Here to help
We are here to help with any staff queries, so feel free to call me on 021 741 544 or 0800 HRtoolkit (0800 47 8665).  Or sign up for our DIY document library for only $399 + GST per annum, or our DIY expert package which gives you access to the document library and unlimited phone and e-mail support for only $129 + GST per month (minimum 12-month term)