Mar 11, 2026

The Fine Line Between Understaffing and Overstaffing

Maintaining the right level of staff is crucial for any business. You don't want too many or too few employees. Read through for tips on how companies manage the balancing act between the two staffing extremes.

A much-publicized example of overstaffing is when Amazon hired hundreds of employees driven by the demands of the pandemic. When business returned to more normal levels, Amazon faced the fact that they were overstaffed and were forced to let 90,000 employees go. This brought negative attention that diminished the brand's image.

The challenge for human relations professionals is to find the staffing sweet spot that optimizes workforce productivity. Having too many employees leads to inefficiency, while having too few creates a disgruntled, overburdened staff. While no one has a crystal ball to predict industry trends and thus inherent staffing needs, there are strategies that can be taken to make sure that your organization does not get into an overstaffing or an understaffing situation. Here are some corrective measures to take to fine-tune your staffing requirements:

• Keep abreast of economic and industry trends to prepare for immediate and future staffing needs. Even when there is a downturn in the market, companies may not be inclined to lay off workers. However, this can result in retaining an excess of employees, which places a burden on the company's bottom line. This can have consequences for the overall health of the organization that will need careful monitoring.
• It would be a sound strategy for a company to cross-train a section of its employees to be able to perform tasks beyond their immediate job. If the need should arise, employees would be already trained to take on additional responsibilities, thus saving time and money in the hiring process. Prior professional development ensures a smooth transition to taking on a new role. Flexible employees can adapt quickly to the changing needs of the company.
• Managers need to effectively communicate with their reports about the company's changing needs. Good communication is important for employees to "buy into" changes and to be prepared for additional training to take on new roles.
• Coordinating a team with an excessive number of employees may be challenging for a manager. Overstaffing leads to miscommunication and confusion over role assignments. This may negatively affect employee productivity and morale. Too many employees competing for the most visible career-boosting roles can lead to conflict and pressure to keep their current jobs. For employees with not enough work to do, boredom may set in. With time on their hands, they may be thinking about moving on to a more satisfying job. The manager must make the disagreeable decision to cut unproductive staff to maintain productivity and to keep employees motivated.
• HR must continually monitor staffing to identify departments that are overstaffed or understaffed. An analysis should answer the question of how this happened and what can be done to prevent it from happening again. The information is instrumental in making decisions regarding hiring, training and retention.

Most companies will find themselves in the position of being either overstaffed or understaffed. There is a clear price to pay in terms of net profit or employee satisfaction. The best advice is to monitor industry matrices and to implement appropriate staffing strategies. 

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