This is NOT Lean: Lean Staffing

In this post I would like to talk about another term that claims to be lean: lean staffing. It is NOT lean! It is an abomination. It is pretty much the opposite of what, in my opinion, lean stands for. It is a complete lack of respect for humanity. Let me explain you what it is, why it is terrible, and how to prevent this. Note that this post may include a rant here and there.

What Is Lean Staffing?

Lean staffing is a buzzword that is making its way around America. It is basically a deliberate and drastic under-staffing of whatever you want to do. You intentionally provide not enough manpower for the work, and let the employees scramble to make up for it. Or even if you provide (barely) enough manpower for the average work, it is insufficient to cover the fluctuations. Often it is combined with paying the lowest wage the company can get away with. The reason for this is simple: the owners want to save money and reduce labor cost. But this is very short sighted, as we will see.

Sometimes lean staffing is also used to properly link the tasks with the people (i.e., which person does what when). That may be of use, but the abuse to simply cut labor to the bone is bad. Really bad!

Where Does It Come From?

Lean staffing comes from the USA. It seems labor relations in the USA are on a very different level than in Europe. Europe sees a company as a social construct, and the company needs to care for its employees (and this is often required by law). In the USA, a hire-and-fire approach is common, and employees are often seen more as biological machines… and treated as such. There is a lack of compassion for workers of middle class and below.

“Neutron Jack”

One early driver of this was “Neutron Jack” Jack Welch, the CEO of General Electrics. He was probably the most prominent top manager who put profit before the happiness of his people. He popularized the “rank and yank” policy (nowadays euphemistically called the “vitality curve”), where the bottom 10% performing employees would be fired each year. This led to a decline in morale and motivation, as well as increased discrimination, and may not even have saved any cost since all managers now spent a lot of time on looking good. The evaluations also cost a pretty penny. Jack Welch increased the valuation of GE, but this may be mostly due to mergers and acquisitions, while the overall value of the company suffered. Overall, it is uncertain whether he was a good manager or was merely looking good.

Where Is It Used?

Waitress re-stocking Buffet

Lean staffing is most commonly found in the service industry and in development. It is more difficult (but not impossible) in manufacturing. An assembly line provides regular work, and having not enough people may stop the entire line. Additionally, technical job workers, even low-skilled ones, do need some training to do the job correctly, which has problems with high turnovers. The workload in service jobs often fluctuates much more, and an under-staffing may be followed by an over-staffing if the current demand goes down.

Why Is It Terrible?

Lean staffing is terrible. First, it creates an incredible hardship for the employees. Due to the under-staffing, there is always more work than reasonable. Good work is a mixture of busy and not-so-busy times. Being required to always give 130% burns out the workforce. This is often combined with excessively long hours to still get the work done. Lots of pressure and guilt trips (“Do you want to let your coworkers down?“, “We all need to give our best,“…). I read one credible Reddit post (since deleted) where a nurse claimed she was assigned to work 144 hours in a row, or six days straight around the clock. This would be humanly impossible.

People are forced to come in when sick, do two jobs, or do jobs they are not properly trained for. Even if the staff is not exhausted already, safety measures may be neglected. Overall, the employee may get burnout, and both mental and physical health may decline. Once they can no longer do it, they are discarded by the company (i.e., fired) and the next sucker is hired.

What Are the Effects?

The effects are terrible on the employee. Mental health may decline, physical health may diminish, and the paid wages are often at poverty level. There is no time for friends and leisure, and life is simply no longer fun. If you are curious, for the US you can calculate the poverty level and the living wage for your location here livingwage.mit.edu. After looking up some data, I increased the wage of my copyeditor by 20% to make it (hopefully) a decent wage. I’d rather have a happy service provider than save a few bucks.

The effects are also bad for the company. The company discards a burned-out employee like a broken tool and gets the next one, and the employees are not stupid. They quickly notice if the company is abusive, and the morale of the employees drop. If the company does not treat them well, they quickly—and rightfully—no longer give a sh*t about the company either. The quality of work declines. Workers may be looking for a better job, and quit at short notice, increasing the under-staffing even more. There are multiple anecdotal examples where the entire staff just walked out, and the business had to close temporarily or permanently. The word gets around, too, and staffing may become more difficult. There is an internal memo at Amazon where they worry “If we continue business as usual, Amazon will deplete the available labor supply in the US network by 2024.” In other words, they may run out of people to hire by 2024 due to their eye-watering 150% annual turnover rate.

Overall, this is not a sustainable business. Demotivated and burned-out employees that do not care about the company. High turnover with frequent hiring and firing, including the associated expenses for onboarding, training of new employees, and severance pay or unemployment benefits for dumped workers, not to mention possible legal costs. The customer will notice, too, if the quality of the service is shitty, and may take his money elsewhere. Overall, the entire company will fall short of its potential earnings.

How to Prevent This

The whole problem of lean staffing seems to be mostly a US problem. While in Europe some employers would like to do this too, European labor laws protect employees from abuse. In Germany we get at least 25 days (usually 30) vacation every year. Additionally we get almost unlimited paid sick days. I have heard of employees that were finally let go after 2.5 years of uninterrupted paid sick leave. Firing is difficult and requires a very good cause. If the company messes this up, the courts will breathe down their necks. Except for gross misconduct, there is a termination period of at least 1 month before an employee gets fired and actually leaves the company. Depending on your stay with the company, this can increase up to seven months.

Since companies in Europe are forced to stick with the employees they have, they must treat them not as expendable but as a fixed asset, and take care of them and maintain good relations. The USA often sees workers as commodities to be disposed of if they no longer work. Europe usually sees them as investments, and they have to work on maintaining relations. Partially responsible for this are labor unions that represent the interests of the workers. Not all unions are good, but no unions would be quite bad. Unions in Germany are, in general, also seen as cooperative and working with the company to its overall success. The unions of one plant I worked at had a strike every year out of principle, but they scheduled it two weeks in advance for a Friday afternoon one hour before closing time. Hence, while they proved that they can strike, the actual impact on the plant was negligible. Overall, unions can also influence the government to improve labor relations. But in the USA, many companies are fighting against unions (“union-busting”) with legal and not-so-legal means (Starbucks, Amazon, Apple, and many more).

Overall, work life in Europe is much more benign than in the USA. A worker in the USA, even in middle class, has the constant threat of losing everything. You got cancer? Here’s your multimillion-dollar medical bill. Now you are homeless too, and still have cancer. Europe provides many safety nets like unemployment insurance, health insurance, pension insurance, and more. While you still can fall, it is unlikely to end in homeless, broken, sick ruin. This lack of safety in the USA makes many people literally sick. Crime increases, mental health overall declines, and the entire nation pays the price for a questionable profit of some companies. I have worked in both the USA and in Europe, and while Europe also has its flaws, I much MUCH rather prefer to work in Europe.

I hope this was not too much of a rant. I love lean, and it hurts me to see the total opposite of lean labeled as lean. Now, go out, respect your employees, and organize your industry!

16 thoughts on “This is NOT Lean: Lean Staffing”

  1. Great post! We can talk all day about a lean transformation, but without employees who are respected and continually developed, it’s nothing more than meaningless words. Pay is only part of the issue, but it is a big sign of whether team members are respected or not.

    I’ve always liked Dr. Deming’s comment about “deadwood” in an organization . . . “Were they dead when you hired them or did you kill them?” We rarely look to the manager for the root cause when someone is fired – e.g., if the fired employee was so bad, why was he/she hired? If the person “went bad,” why and what did you do to help him/her improve?

    Having worked in Europe and the US, I’ve always felt that things would be different if it was more difficult for American companies to release employees. I’m thinking we would take more time to hire the right person, pay them better, and make working conditions and development a priority.

    Thanks for the post.

  2. shock and horror.
    good post.
    this is modern slavery in some ways. perhaps it is.
    it also gives lean a bad name,
    we live in times when malevolence, greed, self-glorifaciton, power and more prevalent than we might expect.
    for might part i would venture to say the six sigma community made some contribution to this as too many guru consultants approach client work with process improvement and statistics and that has nothing to do with lean aka TPS.
    the Industry 4.0 or is it now 5.0 im not sure also drums the beat that you can solve problems by just becomeing more techi in your business.
    MBO also has contributed to this lean slavery as it encourages management to run by numbers not the way we get those numbers.
    It seems to me more and more that we are dealing with intentional and naive unintentional persons who are out there destroying the idea that work is for man and not man for work, destroying meaning and purpose, destroying the idea that if you are in a leadership position you are accountable for the well being of people and you will be accounted for some day for your deeds.
    Thank you for the article

  3. Great post!!

    I can relate to pretty much everything you mentioned. I work as a manager at Walgreens and the company does not care at all about their employees. They are in so much debt so forget about getting a raise. As a 22 year old I was working over 50 hours a week because we have no staff and they know no matter what we still have to get what needs to get done but with less staff. I would be running around trying to get the basics to run the store everyday and I couldn’t even get anything else done. We get no days off, we have to work every holiday which means missing time from my family. As a manager I only make $1.50 more than a cashier and I have so much more responsibility. We actually just started getting paid time and a half on Sundays and that is only because they got sued by the state of Vermont. I could go on and on but as a multi million dollar company they need to change their approach and maybe look at the European work place. Where they have to treat them right and take care of them. Also hire more people and pay them better that’s what’s going to drive people to your company but also if you have a great workplace people will want to work for you. Thank you for that post I really enjoyed reading it!

  4. In Brazil, we have a complex labor law, while those laws covers “registred workers”, and the companies spend much money to fire employees, and that is the problem here: big and small companies must to follow the same demission laws, so, small companies keep a low headcount, while big companies keep many unefficient people. The Brazilian labor laws is closer European practices, but we also found “Headcount Reduction” as a KPI…

  5. Very insightful post!

    As a college student, I have experienced lean staffing in my part-time jobs. This became even more prevalent during the pandemic, where businesses sacrificed many of their other values to stay afloat. I have been denied time off for holidays and vacations, even with plenty advanced notice. Personally, I felt my mental discipline suffer in these environments, and struggled with extrinsic motivation. It is important to note how lean staffing ranges throughout all industries, from grocery stores all the way up to Big 4 firms.

    I also liked the comparison that was made to European employee satisfaction. The social constructs followed in Europe begin at the elementary level, where school children are given a more balanced and human-interaction based education.

  6. Great post! After reading this I definitely have a better understand of how lean staffing is such a problem. Jack Welch’s “rank and yank” policy where the bottom 10% of employees get fired each year sounds horrible. This does not seem like an affective way at all to motivate employees to do their best. I have seen lean staffing while working in the restaurant industry. As the restaurant did not have enough servers they expected the ones they had to pick up more hours than initially agreed to upon hire and take on more responsibility. This did cause a high turnover rate with servers throughout the summer months.

  7. Hello,

    From the very start, I was able to easily relate to the topics that are mentioned. My very first job at a small moving company, there was lean staffing issues. At the time, I had no idea this had a certain name until taking lean six sigma classes. I was also able to see how the owners were not interested in how employee felt about certain jobs/tasks. The burnout rate at the company was extremely high especially the older the employee was. This blog was very easy to comprehend with the knowledge that I have. I believe that someone with very little knowledge of this topic would also be able to understand this post. Keep up the great work!

  8. I like your article as this is exactly, how I define LEAN.
    LEAN has nothing to do with reducing your workforce and I have refused any time, a potential client talked about the number of people he felt are not needed.
    This is definitely no respect for the workforce and they are not the ones who created negative numbers. They do their job based on what is defined as a standard.

  9. Whoa, this post is way over the top and quite prejudicial. The US has labor laws too, and not everyone who is trying to staff in a more lean way is a money grubbing egomaniac.

    Yes there are examples where bad bosses cut headcount with the wrong motivations and that’s a problem but railing against this with minimal facts and high levels of prejudice is terrible.

    Having worked and hired in both the US and in Europe I can tell you that the labor flexibility in the US is definitely a plus. Its easy to loose your job in the US but as a result its also easy to get hired. In Europe making a bad hire is such a liability because its so difficult to get rid of employees that you tend avoid hiring unless absolutely necessary and this is not good for employees.

    As to lean staffing in the service sector – I knew one consultant who all he did was benchmark the staffing levels a similar restaurants. He often found 3X disparities on a normalized basis! I personally had to sort out business that were 6X over-staffed and were about to go bankrupt as a result. Overstaffing leads to skills loss, quality defects a reduction in pressure for improvement and a whole host of pernicious effects and is usually much more of an issue than under-staffing which becomes apparent really quickly.

  10. This post is definitely hitting a nerve for me.

    “In the USA, a hire-and-fire approach is common, and employees are often seen more as biological machines… and treated as such.”

    As an American, I think the analogy where an employee is a round in a machinegun belt is more accurate. A machinegun is valuable machine anytime, but it’s useless without a steady supply of ammunition. But while ammo is valuable, individual rounds are more or less expendable if your ammo supply comes in cases of thousands of rounds each.

    I work at a store that’s part of a nationwide auto parts store chain. And I’m seeing all of the negative effects every single day. Understaffing has gone to the level where it takes a roster of people with motivation and years of experience just to keep things afloat. One person finally quits or goes on a vacation, and everything goes straight to hell. I went on a two week vacation about a month ago. A few days later, the store manager “ghost quit” – he just stopped showing up without any sort of communication. A bit later, another person got sent in to take over. A couple years prior, he had to step down from an SM role due to a heart attack on the job. He’s back at it now and already putting well over 55 hours a week due to ongoing cheap labor shortages and not yet having his permissions upgraded to start hiring. We’ll see how it goes.

    When it comes to new hires these days, we’re lucky to get people who can grasp which way a nut threads onto a bolt and not consistently show up to work drunk or stoned. Quite a few stores have drivers who routinely come to work still drunk from the night before and the management get no real options besides looking the other way and lots of prayers.

    One of the most ugly changes to happen in the recent decade or so is the number of companies that did make the disposable, expendable workforce model actually work. Look no further than Amazon. But in their case, every single process has been engineered from the ground up so that 99% of the ground level workers can be easily replaced within minutes of breaking down. Ditto the same for gig work companies such as Uber whose main “innovations” were figuring out how to hire people while offloading all of the risks and expenses onto the workers. And yet they still have yet to turn any real profit after a full decade when their vision for self-driving and self-flying cars didn’t produce much even after burning through billions of dollars.

    Here in California, the law is pretty strict when it comes to injuries caused by work. The likes of Tesla and Amazon made it an art form to fight these claims and to hire private health providers whose job is to care for the company more than it is to care for the patient. Others aren’t so lucky. At my previous job, the company was all to happy to screw people over when the wear and tear from years of physical labor started adding up. A production lead with nearly ten years on the job nearly got canned when his knee problems reared up. On the upside, quite a few workers managed to get “hurt” on the job and were out for months with BS injuries while still getting paid. What’s good for the goose is good for the gander, I say!

    P.S. Have you heard of the Randonda Vaught case? https://en.wikipedia.org/wiki/RaDonda_Vaught_homicide_case

    The chickens are definitely coming home to roost for the healthcare industry here in USA.

  11. This was a great post to shed light on the abuse that many employees face day to day in their line of work. From the start of your blog post I related to it. Lean staffing is a huge problem in the US that needs to be talked about more. I have had part time jobs that I left because it was a negative workplace. The workers were great people, but no one actually liked the company they worked for so they would talk badly or complain about the company all day long. I recently read something about the workplace laws in Europe and I agree that we need some of those here in the US to help decrease poverty. Thank you for teaching me more about the terrible affects of lean staffing!

  12. Prof. Roser, I wonder why you didn’t write about the Japan working culture in this post, particularly in Toyota, the source of Lean and a place where you have been several times.
    Thanks.

  13. Many thanks to all for the comments. I definitely hit a spot there for most of you. Just to clarify, there are also good employers in the US, and you can find decent jobs there, too. And also sometimes you have to let go of people if you have truly too much. But overall it just feels like there is much more exploitation going on than in Europe.

  14. This was a great read. This truly is a problem within the US. Companies are trying to claim understaffing as lean thinking when it is abusive to employees. In the end, companies cutting costs by hiring fewer workers hurt their business more because they tend to have a high turnover rate of employees and do not have staff loyal to their company. How do companies that have been running like this for years change their thinking that fewer employees are not helping them cut costs? I enjoyed the comparison to European businesses, seems as though they have the right idea of how having the right number of employees is beneficial for them.

  15. Hello Christoph, I enjoyed reading your post. I agree that lean staffing is not beneficial long term at all. Trying to save money and resources is a good thing, but not at the expense of their workers. Deliberately understaffing is not the right way to attempt to pull a higher level of productivity from your employees. Your mention of Jack Welch, the CEO of General Electronics, and his “fire the bottom 10% performing employees each year” idea shows that these thought processes are not uncommon here in the US. Even though employment in the US can be much more volatile than in other places, I think it is important to recognize that sometimes it is in the best interests of the company to be able to let go of some workers fairly easily. Sometimes workers just are not the right fit for the job (whether it is because of qualifications, motivations, company culture, etc.), and not being locked into long term employment can help the company find someone who is a better fit.

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