Overstaffed & Understaffed: The Workforce Planning Paradox

Workforce planning has always been a balancing act, one that most businesses rarely get right.

When staff levels exceed demand, costs eat into margins. When they fall short, service and employee well-being suffer. Add the complexity of ever-changing scheduling needs, and this can feel like an impossible task to get right.

This constant tension is what we describe as the workforce planning paradox; the struggle to maintain a workforce that is “just right.”

Understanding it and knowing how to address it is essential for happier teams and optimal workforce operations.

What is overstaffing?

Overstaffing happens when a shift has more workers than it actually needs to meet demand. This often leads to unnecessary labor costs, reduced efficiency, and employees feeling underutilized.

The Cost of Overstaffing

While it may seem like a safe buffer against being short-staffed, consistently carrying excess staff can erode profit margins and strain resources. Excess staffing leads to wasted resources, inflated labor costs, and decreased efficiency.

What is understaffing?

Understaffing (sometimes referred to as skeleton staffing) occurs when there aren’t enough staff to handle the workload or meet demand. Over a prolonged period, chronic understaffing can damage employee morale, hurt service quality, and drive higher turnover.

The Strain of Understaffing

While it might seem like a way to save on labor costs, the hidden consequences are far more expensive. Employees are pushed to cover more than their fair share, leading to longer hours, skipped breaks, fatigue, and rising stress levels.

This constant strain can quickly result in burnout, absenteeism, and high turnover - problems that create a vicious cycle of even fewer staff available to work. Customers and patients also feel the impact, experiencing longer wait times, lower service quality, and inconsistent experiences.

How do you know if your team is overstaffed or understaffed?

Below is a list of common signs to look out for:

Signs of overstaffing

Labor costs are consistently higher than revenue or demand justifies.
Employees frequently have little to do or spend time on low-value tasks.
Productivity per employee is lower than industry benchmarks.
Budget cuts often target headcount without affecting output.

Signs of understaffing

Employees regularly work overtime or skip breaks to keep up.
Customer wait times or service quality suffer.
High levels of stress, burnout, or absenteeism among staff
Turnover rates climb as workloads become unsustainable.
Projects or tasks are consistently delayed due to a lack of capacity.

Other challenges to consider

Beyond headcount alone, staffing imbalances often create additional challenges that can disrupt operations:

Skill mix: Even with the right number of employees, lacking the right balance of skills can leave critical tasks uncovered while others are overstaffed.

Compliance: Labor laws, union agreements, and industry regulations require careful monitoring. Staffing too few or too many hours can expose businesses to legal and financial risk.

Fatigue management: Understaffing often forces employees into overtime, increasing fatigue and mistakes. Overstaffing, meanwhile, can lead to disengagement and underutilisation.

Shift types and coverage: Not all shifts are equal - nights, weekends, and peak-demand periods require precise planning. Misalignment between staffing and demand during these times amplifies both overstaffing and understaffing issues.

Adapting to change

Even if you do manage to find the just right solution, no schedule stays perfect for long. Demands shift by the hour, employees request time off, and unexpected absences can throw even the best plans into chaos. That’s why a scheduling system that allows for flexibility is critical.

How do you prevent understaffing or overstaffing so they’re “just right”

Achieving the perfect staffing balance means looking beyond just headcount. It’s not simply a question of how many people are on the schedule, but whether the right people, with the right skills, are working at the right times. It also means a schedule that can handle and adapt to changes to maintain the most optimal staffing team per shift.

Intelligent workforce management platforms can help by automatically rostering for the correct number of people you need on different shifts. This also helps ensure that the right skills, certifications, and labor laws are complied with.

They can also balance tricky areas like fatigue management - avoiding excessive overtime while keeping staff engaged and matching shift types to demand (and staff preferences), whether that’s nights, weekends, or seasonal spikes.

The goal isn’t perfection every single day, but building a system that flexes with real-world challenges. When staffing is “just right,” employees feel supported, customers and patients receive consistent service, and businesses save time and money - creating a win for everyone.

Building optimal staff schedules

The workforce planning paradox isn’t solved once and for all - it’s managed continuously.

The easier it is to set clear scheduling rules, the less likely you are to face overstaffing or understaffing. A strong system should also adapt to changes in real time and flag potential conflicts before they happen. That means combining smarter technology with employee feedback, while planning for both short-term fluctuations and long-term growth.

When businesses prioritise both efficiency and human needs, they build teams that are more engaged, resilient, and loyal.

The result: a workplace that runs smoothly not just today, but for years to come.

If you have challenges with overstaffing or understaffing, book in a quick chat to learn how RosterLab can help.