Back logs, slack and availability in your labor force’s schedule

Most companies in America have no available labor. How can they possibly accommodate new clients if they refuse to do overtime and have no available labor? The answer is that they sometimes take on new clients, but lose them to offshore outsourcers soon after. And once you ruin your reputation with a particular client, they will never come back to you. It is better to tell them you are booked up and not accepting clients at the moment.

Running a data entry company or software company is not easy. You have a certain quantity of workers. You have jobs coming in at unpredictable times. It makes sense to have a back-log of work that is going to be done in the future. That way you can deal better with the short term fluctuations in demand.

But, you have several choices if you want to have some availability in your schedule to accommodate new clients. You can either have one worker on the bench who is not doing anything other than waiting and being available. Or, you can have back-logged work and postpone the back-logged work to make time for your new client. If you have different pricing models for work that needs to be done immediately verses in the next few weeks, verses in the next few months, you can gain tremendous flexibility for attracting new clients and grow your company. Most companies are not thoughtful enough to come up with strategies for having availability — and this is exactly why they don’t grow.

Another mistake American companies make is that they don’t raise their rates when they have no availability. If a hotel has only a few rooms left, they raise their rates, so that they can have an equilibrium of availability. The goal is usually to maintain an average availability of 20-30%. That way if demand fluctuates upwards you will still probably have a few rooms left, and if demand is unpredictably low, you might still be half full. Hotels have mastered the balancing act of supply and demand, but I have NEVER seen a software company or data entry company show any signs if even having thought about this principal.

Overtime is yet another way to guarantee availability. Yes, it costs more to pay for overtime, but that way you can keep your newly acquired clients. You might lose a few hundred dollars, but you keep the clients which could be worth hundreds of thousands of dollars. Unfortunately, this concept is too long term for Americans to understand which is why their business is quickly going to India!

Remember: no availability = no growth
Find a way to always have potential for availability in your schedule.

Also remember: America’s stupidity is India’s blessing. India will eventually take many of the clients that got burned by negligent American companies!

You might also like:

Should you have slack in your schedule as a manager?

Making deadlines at work and enforcing them

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