Seasons come and go. The tide has highs and lows. The moon goes through phases. Almost every aspect of life has an ebb and flow; a rhythm that means one day is not exactly like the next.
Your business is part of that. It goes through cycles. Manufacturing and sales-related companies face busy seasons and quiet seasons. Consulting companies encounter similar peaks and troughs. The fact is that there are very few companies in the world that can anticipate a completely steady level of work and income every month. So how do you ramp up for the busy times without being over-staffed during the quiet times? It’s one of the greatest challenges an HR manager faces today.
Currently there are a few standard ways in which employers respond to this. In his book “Annual hours, contracts and working time transformation”, consultant and author Jon Pasfield outlines some of them as follows:
Employ enough staff to meet the low times, and ask them to work overtime during the high times.
An example of this might be in accounting departments, where finance staff are asked to work overtime during month end and working up to the year-end period. Pasfield observes: “This can work well if the working time need for the majority of the year is flat, and the busier times are very few, short lived, and not much busier than the rest of the year.” However, there are drawbacks once the busier times become more frequent or lengthier, as is often the case for finance professionals. This can become “expensive because a lot of the work is done at premium rates” (on the understanding that employees are paid higher for overtime hours worked). Also, planning becomes difficult. “It is not easily manageable because it relies on the willingness of staff to work outside their contracted hours”, says Pasfield.
To employ more staff than is needed at high times of the year and have surplus staff during the low times.
If the busy periods make up a large portion of the year, this approach might become necessary. There are obvious downsides to this as well, though. “For the business, it is expensive in unit cost terms … for part of the year, the work is being paid for at premium rates … at other times, staff are being paid to be idle,” says Pasfield. Not only is this expensive for the company, it also encourages a highly undesirable corporate culture of not using time optimally.
The Finance Team recommends a third option.
Hire the right number of full time staff for the low times, and bring on ad hoc, part-time or interim staff members for peak periods.
We advocate outsourcing financial executives for the following reasons:
- You’re not paying regular staff members premium rates to work long hours, as you would be in scenario 1. Research has shown that productivity decreases when an employee works more than 50 hours a week. So essentially, in the first scenario, you’re paying your staff more to work less. Outsourcing financial executives means you may be paying a slightly higher rate than you would a regular employee, but you’ll be getting more from that person who is fresh and motivated than you would from an overworked full time staff member.
- Outsourcing financial executives when needed means you won’t be paying full time salaries to staff who are under-employed for some of the year. In this way, you’re promoting a healthier corporate culture and saving on your bottom line. The staff you hire know they’re required to give of their best every day of the year, and they’re remunerated accordingly.
- Outsourcing financial executives allows you the same continuity that you might enjoy with a full time staff member. A valid argument against hiring temps during a busy period is that they need to be trained each time, and productivity is lost during that process. But outsourcing financial executives provides a different solution. It means that whenever you need them, the same finance professionals can return to your business for the period of time they’re needed. They build up an increasing amount of familiarity with the company as they do so. No down-time is wasted with repeated training.
Outsourcing financial executives provides a solution that is more efficient and cost-effective than both scenarios one and two. It allows you to employ the optimum staff level, promote a culture of productivity, and get the most out of all staff members. If this solution sounds appealing, get in touch with The Finance Team for a no-obligation cost analysis.