Best Practices


There has been a lot of focus in the news over the past year on jobs, and rightly so. Businesses have to decide how many employees they need to fulfill current and future needs, what skills are required, where those employees should be located and how they should be compensated. Often we dont make conscious decisions on such issues but rather start from the current state and make tweaks from there in reaction to budgetary changes. However, it is prudent to take a step back and focus on how you are staffing your organization and whether it is in line with your organizational strategy and competitive environment.

Where might you start on such a broad topic? I would obtain data on staffing by department and trends over time. In addition to headcount by level, department and geography over five years or so, I would look also at the use of consultants and part-time help, as well as overtime data. Once you have the data, here are some key questions:

Are the staffing trends in line with your strategic objectives? For example, if you have a focus on technology excellence, an upward trend in staffing could be expected in your technical organization, but not your manufacturing or customer service areas. If the trends do not seem to fit with your strategic focus, dig in to understand what is behind the trends and seek better alignment.

Is your geographic deployment of resources changing in line with your strategic direction? For example, if you are targeting growth in a new region, then additional sales and marketing resources in that region would make sense. However, I would expect some offsets in other regions or functions.

Is staffing going up faster than company growth? Unless you are a startup company, this is unlikely to make sense. Question what processes you have in place to manage staffing levels, and consider raising the scrutiny of new job creation.

Is use of overtime or contract help going up rapidly? This sometimes occurs when full-time job creation is more limited than overall budgets. Consider whether this is acceptable or not. Perhaps you are paying more for that work than is necessary. On the other hand, sometimes use of contract help is a good idea if the work is a bubble or requires special skills on a temporary basis.

How does the size of your organization compare to that of your competitors? This information may be hard to obtain, but it is very useful in forming an idea of your productivity compared to key competitors. Of course there can be reasons for differences, such as use of contract manufacturing or maintenance versus in-house resources, or differences in scope of products or geography. The bigger the difference in productivity, the more closely you need to analyze what is behind the discrepancy.

Consider the use of outside consultants and benchmarking studies in areas such as manufacturing and maintenance. These can give you valuable insights into your competitive position in these areas, which tend to be high in dollars and staffing.

Take a look at your trend in average span of control, e.g. the average number of people reporting to each manager throughout the organization. Is average span of control going up or down? In broad terms, information technology improvements should, over time, allow an increase in span of control. If this trend is going in the opposite direction, it should be examined further.

Now that you have analyzed your staffing trends, you should have some insight into which direction to take. Perhaps you see that downsizing is needed in a particular area, or even across the organization. This is never an easy process and is not to be taken lightly. Here are some tips based on my experience:

If the gap between the current and desired state is not large, seek to close it with a short-term hiring freeze and/or by offering a voluntary separation program. Be sure to enforce employee performance review processes and separate employees who are consistently falling short of performance expectations.

If the gap is significant, be sure to plan the entire downsizing process and consider setting up a team to manage it across the organization. Communicate clearly the case for action, the process and the timing. Consider actions that will aid employees such as retraining, placement in other areas of the organization, severance packages and the like. The entire organization will be judging the management team by the way such a process is handled. Poor handling will lead to bad morale among remaining staff and is counterproductive.

Involve your legal advisers and human resources departments throughout the process.

Try to complete the process in an expeditious manner, and recognize the need to re-energize the organization once the process is complete.

Perhaps your staffing evaluation has instead uncovered a considerable need for hiring in a certain area. Consider the following advice:

With each hiring requirement, consider whether you are hiring for the job or for the whole company. If you are hiring a subject matter expert in a specific area, you are hiring for the job; more often you will also be hiring for the higher purpose of strengthening the company management succession. The latter purpose may benefit from broad organizational participation in the interviewing and hiring process, and from a more patient and purposeful search process.

Examine your onboarding process. Consider mentoring and buddy systems in order to better transition new joiners into the company culture and position them for success.

Consider the hiring process as a means to grow diversity in your organization. This could be diversity in gender, race, educational background or thinking style. Consider how diversity may be changing in your customers organizations and whether your company is keeping up with the changing demographics.

Staffing your organization is critically important to future success, so be sure to step back periodically and take a more fundamental look at it rather than merely an incremental one.

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at or phone (908) 400-5210.

Related Topics

Best Practices    Business    HR