Should You Hire More Employees or Pay Your Existing Staff More?

A growing business eventually runs into an uncomfortable question: "Do we need more people, or can the people we already have simply work more?" It sounds like a straightforward staffing decision, yet once you account for employee availability, working-hour limits, changing demand throughout the week, overtime costs and the cost of hiring, intuition becomes considerably less reliable. I explored this question using a fictional restaurant with a staffing problem that is representative of the kinds of decisions businesses regularly face. The interesting part wasn't simply finding a staff schedule, but discovering where the actual constraint was, and what it would cost to remove it.

The Restaurant

First, look at the total capacity Eight employees working a maximum of 36 hours each gives the restaurant: 8 × 36 = 288 available labour hours per week. That sounds like a reasonable amount. But now look at what the restaurant needs. The staffing requirements across the week add up to 390 labour hours. That's already a problem. The restaurant requires more labour than the existing team can supply under the 36-hour limit. But the situation is even more revealing when we look at where those hours are being consumed. Monday through Friday alone require 252 hours. The entire workforce has only 288 hours available for the week. That leaves just: 288 − 252 = 36 hours for the entirety of Saturday and Sunday. Yet the weekend requires substantially more than 36 hours. So the problem isn't simply: “Saturday is busy. Let's find someone to cover Saturday.” The shortage is structural. The existing workforce is already heavily committed before the weekend begins. Could we simply hire more people? Possibly. But we shouldn't immediately jump to hiring. There is another option. Increase the hours of the existing employees. If the business allowed its existing employees to work additional hours, perhaps the staffing requirements could be met without adding people. So I tested that possibility. Under the assumptions of this case, the existing eight-person team becomes capable of meeting the requirements when the weekly working limit is increased to approximately 54 hours per employee. That changes the nature of the decision. The question is no longer: “Can the existing employees cover the work?” They can, if their available hours are increased sufficiently. The question becomes: “What is the cheaper way of obtaining the additional labour capacity?” Option 1: Increase existing employees' hours Suppose overtime beyond the normal 36-hour limit is paid at a premium. Under the assumptions used in this case, allowing the existing employees to work additional hours produces a feasible schedule at a weekly labour cost of approximately: ₦261,000 The restaurant can therefore meet its staffing requirements without hiring anyone. But there is another possibility. Option 2: Hire additional flexible employees Instead of asking the existing eight employees to absorb the additional workload, the restaurant could bring in additional employees who are available particularly during the busier part of the week. I tested how many additional employees were required. One wasn't enough. Two weren't enough. Three additional flexible employees were required to make the staffing requirements feasible while keeping the existing 36-hour limit. The resulting workforce has: 11 employees and requires: 390 labour hours per week The resulting weekly labour cost is: ₦229,500 The comparison Now the decision is much clearer.

or example: What happens if Friday sales increase? What happens if Saturday becomes even busier? What happens if an employee is absent? What happens if the restaurant extends its operating hours? What happens if demand becomes more volatile? The current recommendation solves the stated problem. It doesn't magically make the business immune to future growth. And that's an important distinction. The deeper lesson The first question looked like a scheduling problem: “How do I arrange my eight employees?” But the analysis revealed that this wasn't really the central question. The more important question was: “How much labour capacity does this business actually need, and what is the most economical way to obtain it?” That distinction matters. A business owner can easily spend hours moving employees between shifts, trying to make an impossible schedule work. But if the underlying capacity simply isn't there, rearranging the same people won't solve the problem. You can move the pieces around the board all day. You still have the same number of pieces. There was also a useful negative result I initially considered whether adding workers who were available only on Saturday would solve the problem. It didn't. The reason became obvious once the weekly requirements were examined properly. The restaurant wasn't short of labour exclusively on Saturday. Its existing workforce was already heavily committed during the weekdays, and there were additional requirements on Sunday. A Saturday-only solution therefore attacked only part of the problem. This is one of the reasons I find quantitative analysis useful in business. The location of the problem matters. Adding resources in the wrong place can leave the underlying constraint untouched. What should the owner actually do? For this particular scenario, and under the assumptions used in the analysis, I would recommend the flexible-hiring option. Three additional employees with availability concentrated around the busier periods allow the restaurant to meet its staffing requirements while keeping the existing 36-hour weekly limit. It is also cheaper than the overtime alternative by approximately ₦31,500 per week. But I wouldn't stop the analysis there. Before making the hiring decision, I'd want to test questions such as: What if demand increases by 10%? What if overtime becomes cheaper? What if the new employees require training costs? What if one existing employee leaves? What if weekend demand falls? How much additional revenue would the restaurant need to generate to justify the additional labour? Those questions turn a single recommendation into a decision framework. The point isn't to replace judgement An optimization analysis doesn't tell a business owner: “Do this because mathematics says so.” It gives the owner a much better foundation for deciding. It identifies the constraints. It shows where capacity is insufficient. It compares possible solutions. And, perhaps most importantly, it makes the cost of each alternative visible. In this case, the difference between hiring and increasing existing hours wasn't obvious from looking at the rota. It became obvious when the numbers were put together. And that's often where good business decisions begin: not with a better guess, but with a clearer picture of the problem. Method used This case was treated as a workforce scheduling and capacity-allocation problem, with employee availability, weekly working limits, staffing requirements and labour costs considered simultaneously. The analysis tested multiple staffing configurations and compared the resulting feasible solutions. All figures in this case are illustrative and intended to demonstrate the analytical approach rather than describe an actual restaurant.