The best staffing ratio
A danger area for all
contractors, especially in this recession with declining sales opportunities, is
eliminating or laying off outside techs and installers without addressing the need
to do the same with people on the “inside”.Rule of
For every two techs or installers out there doing the work,
there should be one inside (support) person. This is the best of staffing
ratios, which is 2:1.
Example: Ten techs (or installers) each billing
for their work for five inside people who don’t install or bill for their work.
rare exception, a company that has a 2:1 staffing ratio is very profitable
because the company isn’t too bloated with overhead expenses.
what! You count as inside staff unless you’re spending the majority of your
time working in the field and making the company money by selling. Having
others do the work is better, but still counts toward inside staff.
problem comes with companies that once had a number of techs and installers out
there making money and got used to having all the staffing positions filled on
their organizational chart by someone other than themselves. It’s nice to have
a personal secretary or a service manager or someone else doing the books
besides you or your spouse. But, if the outside sales falls and outside staff
is cut, you must take the steps to cut your inside overhead.
the way, if you have a staffing ratio of 1.5: 1 you can still be a profitable
Example: Nine techs (or installers) each billing for their work
for six inside people who don’t install or bill for their work.
if your staffing ratio drops closer to 1:1, which would be:
techs (or installers) each billing for their work for nine inside people who
don’t install or bill for their work.
are in a very precarious position!
What can you do?
by tallying up who’s on the outside and who’s on the inside. Count yourself and
any sales staff, warehouse people and such who don’t bill directly for the work
they do (a.k.a. don’t install). Then, think
about what job positions can be combined and, if necessary, done away with or
sub contracted out until you get back to a profitable and sustainable staffing
the goal is to get back to growing your marketing and sales opportunities and
building your staff the right way with the right resources and in the right
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