Most services firms choose to make their people work more hours! The thought being that they can't afford more people until they have more revenue and profits.
Just look again at the inescapable logic of this. If your services firm charges by the hour, the incentive will be to get current staff working more hours! Paid overtime will reduce profit margins, and in any case your staff will only be willing to do so much. Unpaid overtime is not an infinite resource either and again there will be a limit to people's willingness to do it.
“Adding capacity after revenue is generated is not repeated in other
industries outside services”
Presuming you already have good people and are managing them well, is it going to be possible to significantly improve efficiency without paying them more? And if you increase your hourly rate to your customers, won't your staff expect to get a share of the extra profit they are helping to create?
This process of adding capacity after revenue is generated is not repeated in other industries outside services. Manufacturing companies, for example, start by investing in machinery in order to make things, in order to make revenue - Not the other way about.
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