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Same Workers, More Work
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Business New Haven
10/16/2000
By: BNH
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Report says many companies could increase productivity without adding headcount
A new survey challenges the conventional wisdom that worker shortages are suffocating small and mid-sized business growth.
Findings released earlier this month by the management consulting firm George S. May International Co. revealed that although nearly three-quarters of owners of such businesses (74 percent) said they were finding it difficult to find new employees, 82 percent of the same companies were using existing staffs to handle the increased workloads brought their way by the booming economy.
“This finding spotlights the fact that today's tight labor market, which can be viewed as a problem, may well be a blessing in disguise for many companies,” said May President Donald J. Fletcher.
Fletcher said his company's survey showed that more than four out of five surveyed businesses were in fact able to absorb additional work with their current staffs. Hiring more workers, he said, can sidestep a key management issue: effective utilization of employees.
“Too often the automatic response to more work is to hire more workers,” Fletcher said. “These added costs should only be taken when the company has proven that existing workers cannot cost-effectively handle the increased work.”
The May survey showed that 65 percent of business-owners say increases in business are spurring the interest in hiring new workers. Normal employee turnover (cited by 38 percent of respondents) and greater-than-average turnover (33 percent) were named as additional causes for expanding workforces.
Without question, however, lack of new or additional workers at business have caused responding businesses to delay expansion of services (44 percent) or product production (25 percent).
Nevertheless, Fletcher says, “When a business automatically believes more employees will help it, if it cannot determine if employees are being fully utilized or when it is pushing the limit of what employees can effectively handle, then the owner should be considering the assistant of an outside management consultant to help develop the means to take advantage of additional opportunities.”
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