Abstract
This study aims to examine whether or not Kuwaiti banks are overstaffed based on the data of ten Kuwaiti banks listed at Kuwait stock exchange (KSE) over the period 2010-2018. Using panel regression analysis, the results show that six banks were overstaffed while the remaining four banks were understaffed. Kuwait Finance House (KFH) was the most overstaffed bank in Kuwait while Commercial bank was the most understaffed bank. Gulf bank was the closest to the estimated number of staff followed by AlAhli bank. The results also revealed that there was a statistically significant inverse relationship between staffing level and return on assets (ROA) while, on the other hand, there was a statistically significant direct relationship between total assets and the number of branches with staffing level.
Highlights
Determining the optimal staffing level has been a debatable issue in literature
This study aims to examine whether or not Kuwaiti banks are overstaffed based on the data of ten Kuwaiti banks listed at Kuwait stock exchange (KSE) over the period 2010-2018
Where lnSt is the natural logarithm of the estimated number of staff required by the bank, ROA is the return on assets, TA is the total assets of the bank, SO is the bank staff expense to operating income, and Br is the number of branches the bank has
Summary
While there is no magical formula that can be applied to all economic sectors, Reeves (2002) suggests that industry benchmarks are the best way to estimate the optimal staffing level He criticized the reactional approach where the organization hires more staff during the high business periods and fire them during the low business periods when the overhead cost becomes high that it will affect the organization financial position. This approach will result in future uncertainty among the staff which in turn will affect their productivity Researchers such as Treville and Antonakis (2006) see that moderate understaffing would yield a better performance since the employees tend be more efficient and experience higher motivation. In slightly overstaffed condition employees tend to suffer less from burnout, have higher job satisfaction, and to have better work–life balance As a result, they would be more productive and provider of higher quality services (Rafferty et al, 2007). Results of the research showed that there was no statistically significant relation between the two variables
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