When I am called in to help a struggling business, one of the first things I do is an employee staffing review. Payroll is one of the top two expense items for just about every business. For most businesses, payroll and product costs account for 50 to 80 percent of their costs. If you want to quickly save cash, these are the two areas you should look at first.
As a company grows, people are added to handle problems and customer needs. Over time they often start to create work for themselves to occupy their time. Truth is, there are only two reasons a business owner should hire anyone. The person will help the company make more money, or will make the owner’s job easier, allowing the owner to make more money. There are simply no other reasons to have an employee.
At least once a year you should perform an employee staffing review. This is especially true if your sales per employee (monthly sales divided by total number of employees) has decreased compared to previous months or years.
Scrutinize every job in your company to determine how each one fits into and contributes to the entire operation. They should all be in accord with your company’s rationale, mission, and long-term objectives. Probe every aspect of each job—its basic function, the kind of work being performed, methods, systems, relationships with other employees, and so on.
If a position is eliminated, can those responsibilities be shifted to someone else in the department? Has anyone been performing work that lies well outside of his or her assigned responsibilities? Do all positions require full-time workers or can one or more be filled with part-time employees?
Do we need to hire additional employees to ensure that critical jobs are being staffed properly? Should we hire assistants for the owner so they can concentrate on more important areas?
This is something that the owner must do themselves. Your employees obviously have a conflict of interest.