The holiday season is a crucial period for many businesses, marked by increased consumer spending and greater demand for services. However, the season comes with its own set of challenges, particularly when it comes to staffing. Last year, many businesses found themselves caught in a staffing quagmire — either having too many or too few workers. The balance between demand for goods and services has shifted over the past year, creating a sense of unpredictability. The lessons learned could be invaluable for businesses aiming to navigate the holiday season more adeptly this time around.
The Two Faces of Staffing Dilemmas
Overstaffing
While demand for goods soared during the early years of the Covid-19 pandemic, it stalled in spring 2022. This left many businesses, especially those in the supply chain, with excess workers when the holidays rolled around. Although retaining these workers seemed like a wise move at the time, it led to idle resources and added payroll costs.
Understaffing
Conversely, businesses in the services sector experienced a surge in demand last year. Many faced staffing shortages, which were exacerbated by increased wages to attract workers. This had a domino effect, leading to reduced quality of service and potentially costing businesses as much as 10% in lost revenue.
Predictable Unpredictability: The Market Trends
Even though this year’s holiday season is expected to have more predictable patterns compared to last year, uncertainties remain. Issues such as fluctuating interest rates and public sentiment about the economy create an environment where agility in staffing will be a premium asset.
Strategies for Balanced Staffing
Know Your Non-Negotiables
Some staffing commitments are fixed due to contractual obligations or the nature of the business. Identifying these non-negotiables helps businesses plan better for fluctuating demand.
Flexibility in Scheduling
Understanding the willingness of existing employees to adjust their hours can be a lifesaver during periods of rapid change. During the holiday season, many employees have personal obligations, so knowing who can fill in when needed is essential.
Plan for Contingencies
Businesses need to think ahead and establish relationships with temporary staffing agencies or online labor platforms. This preparation allows companies to react more quickly to abrupt changes in staffing needs.
Treating Short-Term as Long-Term
Even temporary holiday staffing should be viewed through the lens of potential long-term employment. Treating temporary employees well can not only optimize their performance but also open the door for them to become valuable long-term assets.
Tips for Small Businesses
For small businesses, understaffing can be a critical issue. Employees facing increased workloads are at risk of burnout, which could lead to high turnover rates. To mitigate this, it’s important to establish open channels of communication, set clear guidelines for time-off requests, and provide incentives for holiday work.
Whether dealing with understaffing or overstaffing, businesses need to approach the holiday season with a robust strategy. Knowing how to balance staffing needs while also considering the larger economic climate can make all the difference between a successful holiday season and a lackluster one.
