Ek Person Extra

If you need 8, hire 10. Why?
I have a shorter version and a longer version where I describe what happens if you do not. Choose.

TL;DR (Shorter Version):

Need 8. Hire 10. Why?
People take leaves. People fall sick. People go on holidays. People resign.

And then there is religion:
People have a deity (kul devi or devta) that they pray to in their home (or village, of course).
People have shraadh, pind-daan, and other religion things to attend.
People have to go attend satsang when their spiritual guru visits nearby for a darshan.
Some people also take an annual leave to visit their spiritual guru’s town.

I am not saying each person takes all of of these leaves. But the fact of the matter is that in India especially, there are way too many reasons for days off. Bank ka kaam has thankfully reduced since 2016 but there are still way too many things to do apart from work, which can only be done during working hours.

In fact, I have met proud managers in the warehousing industries where their badge of honour is: I made a plan where 33% of my staff was locals, 33% of them were Hindus from UP/Bihar. And 33% of our staff is Muslim. So that, the eCom dispatches continue whether it is Eid or Diwali or harvesting season (in their village).

(Lesson: Running a business in India, even at a managerial level, has more side challenges than GTA V.)

You hire 2 extra. It makes your company a little uncompetitive as compared to foreign manufacturers but hey, as long as your competition is within India, you are all on the same boat.

So, if you do NOT follow the advice, here is what will happen with you:

Say, you already start at 10. Maybe you were given a functioning department to handle. People were functioning at 80% their capacity. You do not change things around right when you start.

Stage 1. One person resigns.

You ask the HR team to put out a vacancy.
If they fill the position, cool. New employee joins. Knowledge Transfer. Done. Bye.
But if they are unable to fill the position and the notice period ends, you tell people to divide the work till we fill it.

You see something you expected: The other nine absorb it. Work goes out. No issues.

And here is the trap: this is the moment you learn the wrong lesson. You discover that the person left but work still went on. Output did not get affected. Quality of work did not get affected. Morale did not drop. Interesting.

You ask HR to not refresh the Naukri job posting.

You also see when one member takes a leave, work still goes on.
If by any change, 2 people take a leave on the same day, work still gets finished. A couple of members take shorter lunch-breaks. A couple of them sit for 30mins extra that evening and the urgent work gets done. The non-urgent gets done the next day.

Very Interesting.

Stage 2. Second person leaves.

For whatever reason, another person leaves. It could be because they are not happy with the salary. It could be because they are unable to cope with the commute. It could be because they got an offer from their uncle’s friend’s brother for a 5x salary job in Dubai or Nigeria.

Now you have eight. Which is exactly what you calculated you needed. Everything still works. On paper you have achieved perfect efficiency.

Somebody says the golden sentence. “Team toh chal hi rahi hai.”

Stage 3. When it rains, it pours.

Output holds. Note that. Output holds. That is what makes this stage so dangerous.

Stage 4. Something breaks. Or Somebody does.

The best one, usually. The one who was quietly holding four things together. He resigns for a job that pays 10% more and, more importantly, ends at 6.

You have also built a self-hurting work environment. More on this later.

Here is what I think most people get wrong about understaffing.

The team does not stop doing the work.
Yes, they do not stop doing work.
But the team definitely stops doing a specific kind of work, and it does it so quietly that nobody files a complaint.

Critical work screams.
If the machine stops, the whole plant hears it.
If the salary does not go, employee’s EMIs would bounce.
If dispatch does not happen, the sales employee’s phone rings by 9 am.
If the GST return is not filed, it is a disgrace and customer’s CA bashes you.

Non-critical work makes no sound at all when it dies.

Nobody sends an email saying “we have discontinued the monthly stock reconciliation.” Nobody puts up a notice: “The vendor rate comparison will no longer be done, effective Monday.” Nobody puts a WhatsApp status: “The weekly preventive maintenance of the machines will be done.. when we get time.”

It just... stops.
The task falls off somebody’s plate and the plate looks exactly the same.

So here is the claim, and I will call it the Silent Drop:

A protective task, when it dies, gives you no signal. You only find out it existed on the day the thing it was protecting fails, and by then it fails big.

The reconciliation was catching two errors a month. It was so boring that nobody ever thanked anyone for it. It stops in April. In October, you find 6 months of drift in one sitting and now you are burning three weeks and somebody’s Diwali.

And you will not diagnose it as a staffing problem. You will diagnose it as a carelessness problem. Because from where you sit, one guy stopped doing his job. The truth is one guy silently chose which of his eleven jobs to sacrifice, made a reasonable choice, and told nobody, because “sir, karna toh chahiye tha, par time hi nahi mila”.

This is the part that actually scares me, and the part I have not seen written down anywhere.

Somewhere below a certain team size, correcting someone costs more than tolerating them.

Your one guy who understands the SAP posting logic does something wrong. Genuinely wrong. Maybe he was rude to a customer. Maybe he skipped a check he should not have skipped.

You say nothing.

Not because you are weak. Because you did arithmetic. If you pull him up and he resigns, you have a four-month hole in a five-person team and no manual for anything he does. So you swallow it. You tell yourself it was minor.

Next month, he does it again, slightly bigger.

Meanwhile the other five people are watching. They are not stupid. They have run the same arithmetic. They now know the ceiling on consequences, and the ceiling is zero.

So the theory:

Your authority to manage a person is a function of how replaceable they are. Not of your designation.

Nobody puts this on an org chart. The org chart says you are the head of the department. The arithmetic says the department is the head of you.

This is what people miss when they call overcapacity a “comfort” or a “luxury” or “fat”. That extra person is not there so people can relax.

That extra person is what buys you the right to say no to your own team.

Cut him, and you have not saved a salary.
You have quietly sold your ability to enforce a standard, to yourself, and you booked it as a cost saving.

This is not something original. Half of this is 25 years old. So here is the homework, in case you want the real version instead of my version.

Tom DeMarco’s perfectly-named book Slack has one argument: chasing total utilization makes an organization brittle, and brittle things break. He asks the exact question you should ask before your next cost review. What if the “efficient” company, the one with the reduced headcount and the stretch targets, is actually the one slowing down and losing money? DeMarco’s line is that slack is what lets a company change at all. If everyone is full, nothing new can enter the system.

Queueing theory, specifically Kingman’s formula: Waiting time does not go up in a straight line as you load a system. Past roughly 85% utilisation it goes vertical. This is the maths behind why losing the first person felt like nothing and losing the third felt like the building fell down. It is a cliff, not a slope.

Eliyahu Goldratt’s Theory of Constraints: He named the thing directly - protective capacity. Capacity deliberately kept above what the work requires, specifically to absorb variation. He was talking about machines. Turns out people also have variation.

Repenning and Sterman, “Nobody Ever Gets Credit for Fixing Problems That Never Happened” This one is the closest to my Silent Drop, and it is very good. They model two loops. “Work Harder” gives you an immediate throughput bump that does not last. “Shortcuts” frees up time right now by cutting improvement work, and slowly eats your capability, which means you need more heroics next month, which means more shortcuts. Down you go.

Their real punchline is about incentives. Organizations that run on firefighting end up promoting the firefighters. The guy who saved the burning project gets the increment. The guy who built the system or the process, which stood tall and did not burn, gets nothing. Because nobody can point at the fire that did not happen.

Where I would add something: they say improvement work gets cut. They do not say the cut is silent.

Oliva and Sterman, “Death Spirals and Virtuous Cycles” has the formal model of stage 4:
Pressure drives people turnover.
Turnover means rookies replace experienced people.
Effective capacity drops, pressure rises.

But they found the nastier bit too - the standard itself falls.
People quietly redefine what a finished job looks like.
Skip a check, stop documenting, don’t cross-sell.
And this eases the pressure, so the graph looks like recovery.
It is not recovery. It is the team agreeing, without a meeting, to do worse work.

Not one of them wrote about the Hostage Line. I think it does not happen in developed countries and large companies where people are clamoring for those roles. Employees do not take the hostage stance there as they know others are waiting to take their place + a lot of the work is documented or automated.

In most Indian MSMEs, hiring takes 3-4 months, well past the notice periods (if served!) and nothing is documented. This enables employees to take the hostage stance.

Here is the last piece, and it is the reason none of this is fixable later.

By the time it is undeniable that you need people, you cannot get them.

You are now the company where the last four people quit. Candidates ask around. The team you have will tell them the truth, and honestly, they should. The stressed team also cannot interview properly, cannot onboard properly, and cannot train, because training is the most non-critical thing in the building and it died in Stage 3.

So the new joinee arrives into chaos, gets no support, and leaves in five months. Which proves to management that “hiring doesn’t help, the market skills are bad.”

Market theek hai. Aap late ho.

The only cheap moment to hire is before you needed to. After that every hire costs double and works half.

Hire one more. Keep buffer capacity. One way to test if you have the buffer capacity - think of the one project / task that you want to do in the department. Can you imagine that they can be given that right now? If no, you do not have buffer capacity.

Keep people happy, of course. But this is very subjective. And people leave due to a myriad of reasons, not just because they are unhappy.

Hire at the vacancy, not at the crisis. The day someone resigns is the day you start with full force, not the day you finish absorbing it and see how it goes. “Dekhte hain, manage ho jaayega” is how you spend your buffer without noticing.

Write down the boring tasks. So that knowledge transfer is easier and less things break. Read:

Create checklists / metrics that you can monitor. Periodic report of what is done and what is pending. So the Silent Drop makes noise. If the reconciliation is on a list, its absence is visible. If it lives only in Ramesh’s head, its absence is invisible until it is expensive.

Treat sustained overtime as a P&L item, not as loyalty. If the team has been staying till 8 for six months, you are not blessed with a committed team. You are running a deficit and paying the interest in quality, in checks nobody is doing, and in a resignation you have not received yet.

Ask yourself the ugly question. Is there someone on my team I have stopped correcting? If yes, you are past the Hostage Line. That is your signal, and it is a better signal than any dashboard, because it is the only one that shows up before the failure instead of after.

PRO TIP: If you somehow manage to come back from the disastrous conditions, DO NOT STOP WHEN THINGS LOOK LESS BLEAK. When you had dropped down to 5 and things were a mess, the committed team stays while you somehow hire 1-2-3 people. They join and they do not leave immediately. So, things are finally looking up. You might have dug yourself out of the hole.
BUT when you go for hiring the remaining 2, your senior employee, your right hand, your consigliere, stops you. She says we do not need any more people. We will be able to manage with 8. We got by fine earlier. With 3 more hands, we will be perfectly fine. You do not need to spend more.

At that time, recall this post.
Recall this Pro Tip from someone who was in your position and has gone through this vicious cycle more than once.
Remember Stage 2: Things look good at 8. And then they don’t.

So, do NOT stop when things get better.

The whole theory in one short note:

Overcapacity is not comfort. It is your smoke detector, and it is also your authority. Delete it and you lose the ability to see problems, and then the ability to fix them, in that order.

Ek person extra.
Until next time.