Let’s face it, In the rental business, one of the few variable costs that you have available to you is labor. In good times, we have a tendency to have an abundance of labor available, but when times are slow, we reduce labor costs by eliminating jobs.
What is the right staffing level? Too many people and you’re wasting money. Too few people and you risk losing good employees and reducing customer service to the point where customers move to competitors.
It is important to weigh the cost of keeping staff vs laying off. But how do you decide what you need? Below are several suggestions to help you determine the right level of staffing for your company.
Step 1: Review Your Workflow
Before you declare that there is no way that you can possibly reduce your staff levels, take a hard look at your workflows. Is there a more efficient way to do business? If you have been in business for any length of time, you likely have several business processes in place that were developed years ago. Do you remember why the process evolved the way it did? Has anything changed about your business that would make that process unnecessary? Do you now have technology in place that you could use to change or eliminate the process? You must be able to review your workflow and business processes honestly and without bias. If you cannot do that, consider having an industry peer or independent consultant review your business with you. It is very likely that you will find a number of instances where you can reduce your labor requirements by streamlining your workflows.
Step 2: Manage Your Schedule
Scheduling employees to work is difficult and tedious. Many business owners do not take the time to properly determine business activity and as a result they end up shorthanded or overstaffed. In my experience, most rental companies tend to staff beyond the current needs, resulting in significant wasted labor hours.
Try this simple experiment. Keep track of the number of customers that come through your door by hour, by day of the week. Do this for a full week. You may be surprised that what you THOUGHT was the busiest day/time is not actually what is true. Do the same thing with Deliveries/Pick Ups, and other labor intensive areas of your business. You will find that you can adjust your staffing based upon the day and time of day. Of course, this limited experiment does not take into account seasonal fluctuations.
Step 3: Train, Train, Train
A well trained staff will be able to accomplish more and they will do it in less time. This is an undeniable truth that you can take to the bank. Each staff member should understand what they are responsible for and why their job is important to the company and to your customers. If your company is not large enough for a formal training program, use a mentoring program to allow new employees to learn from the experience of veterans.
Don’t Forget About Your Customers
As you look for ways to reduce your labor costs, please don’t lose sight of the fact that you can’t reduce labor at the expense of an exceptional customer experience. What you can do, however, is make better use of your staff by improving your processes, scheduling the right employees for the job, and making sure they are well trained. Following these simple steps will reduce your costs AND increase customer loyalty.