Overstaffing vs. Understaffing: Finding the Right Balance

Understaffing vs. Overstaffing: The Balancing Act in Workforce Planning

Success in hospitality depends heavily on optimal staffing. But finding the right balance is often more challenging than it sounds. Understaffing and overstaffing both have significant consequences—affecting productivity, service quality, cost structure, and employee satisfaction. That’s why smart, flexible workforce planning and shift scheduling should be top priorities.

The Serious Impact on Productivity and Service Quality

Understaffing is a common challenge that leads to performance breakdowns. When there aren’t enough employees, the workload piles up, stress levels rise, and multitasking becomes the norm. The result? Tension, chaos—and a poor guest experience.

The consequences are clear:

• longer wait times
• incorrect orders
• inattentive service
• disappointed guests

Guests feel neglected and are less likely to return. Worse still, they may leave negative reviews, which can damage your business’s reputation long-term.

Overstaffing, on the other hand, may seem less harmful—but it comes at a cost:

• inefficient use of resources
• staff standing idle
• decreased productivity and rising labor costs

This lack of engagement can affect staff morale and lead to a poor work culture. Even guests notice when too many employees are standing around—it may create the impression of poor business management.

The Financial & Operational Costs of Ineffective Planning

The financial consequences of poor staffing can be substantial.

Overstaffing directly impacts profitability:

• higher wage costs reduce margins
• every unnecessary staff member becomes a cost driver

In tight-margin businesses, this can be critical. To offset the losses, savings often need to be made elsewhere—perhaps in food quality or maintenance—which can further harm the business.

Understaffing may cause even greater long-term damage:

• unhappy guests return less often and spread negative word-of-mouth
• overwhelmed staff make more mistakes and are at higher risk of accidents
• constant overload increases sick days and turnover rates

High employee turnover is especially costly, as constant recruitment and onboarding drain time and resources.

Strategies to Avoid Overstaffing & Understaffing

A robust and adaptable scheduling strategy is essential to prevent these outcomes. Here are some proven tactics:

Flexible Shift Models and Working Hours

• On-call shifts: Staff can be called in to cover unexpected demand.
• Boost part-time capacity during peak periods.

Use of Data-Driven Models

• Implement workforce planning tools like Nesto:
  • Incorporate live reservations, weather forecasts, and external factors to forecast staffing needs accurately.

Cross-Training Employees

• Train staff across multiple departments:
  • Waitstaff can assist in the kitchen or bar when needed.
• A multi-skilled team reduces the need for extra hires.

Early & Transparent Scheduling

• Sharing schedules early helps employees manage their availability.
• Early communication also supports feedback and shift preferences.

Shift Swapping & Employee App

• The Employee App allows staff to swap or pick up shifts.
• More autonomy for staff improves job satisfaction.

Conclusion

Optimal staffing is key to successfully running a hospitality business. With flexible shift models, data-driven forecasting, and targeted staff training, you can find the right balance between over- and understaffing. The result:

• cost control
• happy, engaged employees
• outstanding service experiences for your guests