How to Deal With Overstaffing

by Joseph DeBenedetti ; Updated September 26, 2017
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Overstaffing has the power to drain a company of vital resources and can cause personnel to become complacent due to gaps in their workload. When overstaffing is identified, it’s important to deal with the situation in a cost-effective and professional manner. Taking steps to reduce overstaffing optimizes a company’s cost structure and maximizes employee productivity.

Temp Labor

Instead of maintaining a staff of full-time employees, businesses can instead use part-time or full-time temps. There are traditional temp services or those that operate completely in the cloud, and both types offer low-cost labor when you need it. If seasonal fluctuations occur at work or if there is an unexpected dip in sales, temporary labor can be reduced or eliminated without going through layoffs and paying severance packages.

Reallocate Personnel

Moving existing personnel to new projects can effectively reduce overstaffing in certain departments, while helping an organization increase its productivity. For instance, if call volumes in a call center are on the decline, customer service representatives can be reallocated to a collections department or added to the sales team to sell new products or services. Because existing employees have experience with the organization, a company can save money if it can reallocate overstaffed personnel to other parts of the business.

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Companies often resort to layoffs to deal with overstaffing. Layoffs occur when it doesn't look like the affected personnel will be needed in the foreseeable future. When companies cut personnel, they tend do so in large numbers, which can be difficult for the employees who are kept. Because letting large numbers of people go is troubling for all personnel, layoffs are usually the last option to reduce overstaffing. Layoffs are unfortunate, but when companies have no other option, they are a viable way to cut costs and improve the bottom line.


Cutting employees’ work hours is one way to deal with overstaffing without having to fire anyone. In government agencies, furloughs are categorized as either administrative or shutdown. Administrative furloughs consist of cutting hours on specific days of the week, while a shutdown furlough can last for a series of days depending on the circumstances. Private sector companies can also reduce hours to save money and deal with fluctuations in revenue. In many instances, the affected employees are grateful for the furloughs; they prefer it to being let go.

About the Author

Joseph DeBenedetti is a financial writer with corporate accounting and quality assurance experience. He writes extensively online with an emphasis on current trends in finance. As a Quality Assurance Analyst, he honed his technical writing skills creating standard operating instructions for a consumer finance organization.

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