Identifying Proper Staffing Levels

Years ago, while attending college, I had the opportunity to work as a manager at a local car wash.  One of the things I quickly learned was that having too many people on hand would quickly kill our profitability for the day.  In order to keep our returns up, we established three simple metrics to determine the number of people we should have actively working.

The first was a metric identifying recent performance or the number of cars we washed the previous day. The second tool was a simple gauge of current conditions – the weather.  Most people don’t want to wash their cars on a rainy day.  Our last tool was an hourly count of our thru put or how many cars we were washing.  Anything less than 20 cars an hour and we would be sending staff home for the day.

The simple example of the car wash taught me how the use of even the most basic metrics can greatly inform and improve your decision making in any business.  Recent research put out by the Mckinsey Global Institute indicates that, “… companies that use data and business analytics to guide decision making are more productive and experience higher returns on equity than competitors that don’t.”

Leveraging Today’s Tools
Today in the collections industry, there are many tools that can be utilized to help management and organizations identify proper staffing levels.  Scoring, profiling, mining, and dialing strategies all help us to know and focus on which accounts are most likely to pay, what a business can expect to realize in the future, and the level of resources that should be expended towards a given portfolio.

This knowledge, like the information applied at the carwash, can go a long way to illustrate how many people are really needed to get the job done.  The old adage of working smarter rather than harder is evident in the organizations that leverage data and tools to help make and validate decisions.

Taking Advantage and Moving Forward
While ensuring an organization has access to the right tools is the first step, being able to both understand and take advantage of the information these tools provide is really what sets one company apart from another.

Analytics and clear metrics will only take an organization so far if they are unable to first match that information up with the goals they have established as an organization – applied analytics.  How is the goal defined?  Why is that the goal?  How will it be measured?  How often will it be measured?  How will the goal itself again be reviewed to ensure it is meeting the company vision?

In terms of staffing, is the company objective to obtain high liquidation rates and gross revenue or is the focus on bottom line numbers and profitability?  The answer to this question can have a significant impact on how many people should work for the organization.  One strategy fosters growth and greater market share but is not as sustainable over the long term while the other is more likely to keep the business cash positive yet small.

Once a company goal has been established, there should be clear communication between all of those who will be impacted.  Additionally, the number of goals established should be consolidated both to avert confusion and also to increase focus on the truly important points that will help to drive the business.

In ensuring your decision making is in alignment with your goals, you’ll find that identifying the proper number of individuals to employ will become more straightforward.  Remember, rather than establishing goals to accommodate the number of people you have, you should instead be hiring the number of people that will help you to reach your goals.

In tandem with the organizational goals that you setup, you can determine the proper tools and metrics to be able to gauge the efficacy of the number of people you have employed, and then look to make modifications to that number as appropriate over time.  Doing so will help you to achieve the results that you are after in becoming more successful as an organization moving forward.

It’s as easy as washing a car.