We are often asked, “how do I know when I have the right number of staff?” Most have too little, some have too many.

Staff payments are usually considered an operating expense of the business. As such, we tend to equate less staff with greater profit. In fact, staff payments represent both an operating and investment expense. When staff spend their time improving the business, we are investing in the business.

Under ‘Lean’ programs, companies aim to remove any expense that doesn’t directly add value to the product or service as perceived by the customer. Under such programs however, there is one expense that is not fully ‘leaned out’, and that is employment expense. Companies such as Toyota understand that to continually improve you need sufficient staff to both run the operations and make improvements for the future. If there is only sufficient staff to run the operations then improvements don’t occur and long-term profits suffer.

Therefore, when deciding on the correct number of staff for your business, consider both the minimum staff to run the operation and the investment you wish to make in the business’s future. By taking this perspective you are far more likely to arrive at an efficient staffing level that maximises your long-term profit.