Topic summary
Overstaffing
Extracted from the Wikipedia article Underemployment equilibrium.
Overstaffing
Overstaffing refers to the state when firms or other organizations that act as employers in an economy are hiring more people than they need. This is much less common than overqualification. This redundancy invalidates unemployment rates as a signal for the existence of underemployment equilibrium. When firms are overstaffed, they can not achieve their maximum profit levels, which leads to undesirable social consequences such as low GDP growth. Organizations plagued by overstaffing, including not-for-profit organizations, cannot achieve maximum efficiency and their ability to create value according to their mission, vision and purpose will be hampered.[6]