Top 4 Risks of an Understaffed Business


Are you endangering yourself, your staff and your company by running with less manpower?

You’re a small business owner who’s learned to roll with the punches when it comes to losing staff, including asking your remaining employees to work extra hours to pick up the slack. For many companies that find themselves understaffed, hiring more people presents issues that seem more challenging than just getting by with what you have. These include the cost to hire and train new employees, increased costs of healthcare and the fact that qualified workers are just hard to come by. And while you aren’t wrong about these issues, it may not occur to you that there’s also several risks to continually running your business when it’s understaffed.

  1. More sickness + injuries = workers’ comp claims

Working longer hours and handling more than their share of tasks results in a higher level of stress for your workers. And experts agree that increased stress can make you sick. Not to mention the fact that working longer hours usually leads to less time to eat healthy, get the right amount of rest and time just to relax and destress. When people are not getting enough sleep or are under a great deal of stress they are also more prone to getting injured. The last thing you need is to have your remaining workers laid up with an injury or too sick to come in.

  2. Incomplete, delayed projects

People can only do so much work in one day. So it only makes sense that when all or most of the responsibilities are falling on the shoulders of one or two workers, the likelihood that they’re going to run out of time is high. We’ve all encountered that company that used to have a great reputation, then over time lost its credibility—they became the company that people refer to as, “they’re just not as good as they used to be”. Your understaffed business could be next if you find you’re continually late or missing deadlines for your clients. And it doesn’t take long before clients start looking elsewhere for their needs.

  3. Higher risk of data breaches and other technology crimes

With less people “minding the store” it’s easy for things like updating passwords and backing up critical data to fall by the wayside. After all, your first priority is serving your customers, right? But we all know the astronomical cost of a data breach, not just in dollars but in reputation.

  4. Poor morale among staff

It’s not fun to come to work and be expected to wear 10 different hats. When an employee feels overwhelmed, it can lead to absenteeism and a poor attitude when they do come in. It’s bad enough that you’re understaffed, if your employees are not wanting to come in or are just unhappy while they’re there, it’s time to take action.
There’s no doubt that as a business owner, you’re faced with arduous challenges everyday. And when it comes to running your company with less staff than is optimal, the risks can end up costing you more than you imagine. Be aware of the consequences of continually operating in an understaffed mode and be sure you’re covered in the event that you encounter any of these problems. Give us a call and we’ll evaluate your business insurance coverage to ensure you have all you need to protect you, your staff and your company.