If you’ve worked in security or have even tried getting a security guard and found it difficult, you are painfully aware that it is an under-staffed industry. While not the only one, any industry dealing with under-staffing has the difficult problem of staying profitable and meeting customer demand. Every business requires a balance of income and expenses, including your clients.
Concerns about personal safety, especially in public venues, makes the demand for security high. In economics, if demand is high, and supply is low, it means the product can be charged at a premium, however, security services must be provided at a reasonable rate in order for clients to hire you, so there must be a win-win. What are some of your options?
One solution is to leverage a line of credit to help support the gap between when you are paid by clients versus when you pay payroll. Usually, in companies with under-staffing issues, significant overtime wages are paid out, and if these expenses aren’t billable, or a percent of overtime expense isn’t in your budget, it can leave you in a shortfall.
Be careful if you use credit as it can become a slippery slope if not managed properly. You may find yourself short on payroll, and in a bunch of debt. But, for the right companies, it can be helpful to have more cash liquidity so operations can continue to move forward.
Labor optimization, in it’s most basic form, means the work schedules of employees are maximized in a way that meets customer, employee, and management needs. Paying overtime can kill profits, taking valuable revenue out of management’s pocket which could better be used for hiring.
Labor optimization can also include scheduling software that allows employees to easily swap shifts (with management criteria established), track peak need trends, and provide insights to help you manage your labor costs.
Always Be Onboarding
Often, we find that when a company is understaffed, it is because they believe they can’t find quality candidates when they need them. This results in a few domino effect situations:
- Management doesn’t let problematic employees go in fear of creating even greater demands on an already overworked crew.
- This lack of accountability produces poor performance in normally high performing personnel.
- Management struggles to fill vacancies, often hiring under-qualified, poor performing staff and/or not properly or completely training them.
- The “good” employees resent the lack of accountability and poor performance of staff and choose to leave, creating even more burden on remaining staff.
- Management pays out high amounts of overtime, wasting value funds.
- Overworked staff leave.
- And the cycle continues.
However, if management is always hiring and training, they put themselves in a position to properly train staff and terminate poor performing staff, thus raising the overall value of the employee base. Because there is no crisis to hire, staff with the right traits can be hired and trained, filling holes in the workload to reduce overtime payouts. The overtime wages can be reallocated to training, job ad placement, and labor optimization solutions.