What do you do with too much capacity?

“Too much capacity? You must be having a laugh!” I hear you thinking. And, I know, for many operations leaders, the idea of surplus capacity lying around feels like a fantasy. But, for many financial back-office operations, surplus capacity is becoming a reality – but, unfortunately, not necessarily a happy one.

In this blog, I’ll take a closer look at this new capacity challenge – what’s causing it, why it matters, and (most importantly) what you can do about it.

So, what’s the problem?

On the face of it, too much capacity sounds like a dream to those of us who have got used to quarter after quarter of stress and stretch. However, as is so often the case, the truth is a little less dreamy.

As part of our efforts to improve our solutions, we’ve sat in on lots of planning meetings (specifically Loading and Variance meetings, for those of you familiar with the Active Operations Management (AOM) methodology). And in lots of those meetings, operations leaders are reporting that market conditions mean their teams’ utilisation is at about 50-60%. In financial services, mortgages are a specific area that’s currently been hit, as the market has slowed, but we’ve also seen reports from UK businesses that the expected influx of work around ISAs hasn’t arrived with the end of the tax year. In short, many operations teams are reporting surplus capacity because there isn’t as much work coming in as they expected.

Combine this with the fact that, according to our data, not being busy enough is worse for the business than being too busy. Obviously, overwork has consequences for employee wellbeing which can have serious knock-on effects to the business, but underwork can in fact cause similar challenges as employees struggle to stay busy. Productivity drops as the work expands to fill the day, meaning that work can actually take longer when you’re quiet than when it’s busy. Employees may become bored and unfulfilled, and therefore disengaged with the business. And, of course, if the quiet period becomes the norm rather than a blip, the organisation may decide it’s time to cut costs through redundancies – an unpleasant experience for all involved.

So, how do you keep people busy when there’s nothing to do? Let’s get into it.

Analyse the cause of the quiet

Before you do anything, you need to know whether this is a blip that will soon correct itself, or whether this is a fundamental change in work volumes. This dictates whether your business endures the change, or adapts to it. Most of the activities I’m about to suggest are applicable in both scenarios, but knowing which one you are in is important.

Ultimately, it’s going to come down to a mixture of input from your financial teams, market reports, and your own gut feeling to decide if you’re in a blip or a new normal. I recommend combining that information with expected staffing changes, holidays, diverted activities and so forth to create a medium-to-long-term forecast and plan of your workload. That plan will help you understand in more detail what your surplus capacity might look like – which will help you decide how to respond.

How to use your surplus capacity

• Find busy teams to support

  As I mentioned earlier, some departments are experiencing a dip in work in – but not all of them. In fact, it's likely that other teams in the business will start seeing an increase in work. Given the tendency in the financial industry to hire and fire in line with demand, it’s not unheard of for an organisation to be making people in one department redundant, while paying for contractors and forced overtime in another department! But what if you could take your teams with surplus capacity, and get them to help overworked teams?

  Get started by talking to fellow team leaders – in your department and others. If you're a department leader, consider how you can facilitate this for your teams. Once team leaders know who is overworked and who has capacity to spare, some resource lending may start happening pretty quickly. And if you can formalise the process, it becomes repeatable and measurable, and can be factored into future planning.

  This gets you through a blip, but what about if your workload has changed for the foreseeable future? Well, combined with my next point, borrowing and lending resource is a great way to lay the groundwork for permanently transferring employees from one team to another. This approach is vastly preferable to the traditional hire and fire cycle for a few reasons:

  • Your busy team gets new members that have already been inducted into your organisation, reducing the induction and training burden on that team.
  • The busy team also avoids the cost and hassle of hiring new people.
  • The business avoids the cost of making people redundant.
  • By avoiding redundancies, the business also protects its reputation and employer brand.

• Devote time to business change

  Every leader has a list of initiatives, projects, or tasks that they’d like to get done – if only they had the time. If you have surplus capacity, now is that time. You can identify and remediate process inefficiencies, set up lean management initiatives, kick off that RPA project you’ve been putting off), or set up a team to investigate how to improve customer satisfaction. They’re all valuable activities, and now you have the time to do them. Better still, once complete, these projects may make work go smoother, faster, or improve customer satisfaction when things do get busy again.

  Upskilling employees falls under this category, too. Of course, there are only so many training courses you can send people on, but targeted upskilling activities can:

  • Improve employee satisfaction
  • Increase work output by reducing skills-based bottlenecks
  • Facilitate resource lending, or eventual employee transfers

  Whether work in is experiencing a temporary slump or it’s a permanent shift, there will almost certainly be some change activities that you can use to keep people busy. If you’re facing a longer-term change to work volumes, then bear in mind that these activities are only a short-term fix, to keep people busy while you plan your longer-term response.

• Look after team wellbeing

  Wellbeing is vital to create a productive and engaged workforce. If work has got quieter, now might be a great time to ensure everyone is feeling their best.

  That might be as simple as encouraging people to take some leave and recharge their batteries. They get a much-needed rest, and you cut down your surplus capacity to see you through a quiet period. It might involve an employee satisfaction initiative, looking at ways to keep team members engaged and happy in their work. Or it might involve giving people the chance to grow through training, helping them feel fulfilled in their job.

Measurement is key to management

Depending on what tools and processes you currently have in place to manage your operations, these suggestions may feel difficult to implement. The way to make them happen is to start measuring productivity and capacity in a consistent, real-time, and actionable way across your organisation.

Consistency lets you make meaningful comparisons across teams, making resource lending possible. Real-time data is important so that you can make day-to-day decisions more effectively, instead of relying on last week’s data (especially if you’re entering a period of lower-than-normal productivity, where last week’s data might not be representative of this week). And making the data actionable means that instead of giving managers endless spreadsheets to pore through, you give them insights that they can use to make decisions.

Armed with that insight, you should find you’re able to work out how best to fill that surplus capacity. Without a doubt, in my mind, the most valuable opportunities are resource lending, and change activities that help improve the way you work. They’re so valuable because they solve two problems in one action – they keep quiet teams productive, and they help ease the pressure on busy teams without incurring cost and help improve the running of your operations, respectively. And, of course, because you’re tracking capacity and productivity, you can report back on exactly how effective these measures are – demonstrating tangible value to your organisation.