When employees work overtime, it can help your business get more done, meet deadlines, and serve customers efficiently. At the same time, however, too much overtime is costly and can lead to overworked staff. It's important to find the right balance and keep your operations efficient to avoid unnecessary overtime. Here are seven tips for managing it.
1. Improve Scheduling and Workload Balance
If overtime is becoming a regular issue, you likely have room for improvement with scheduling and workload distribution among employees. If you rely on manual scheduling, you may be prone to errors, overlaps, and workloads that aren't evenly distributed among employees. Consider moving to a digital scheduling system that can help forecast needs more accurately, track availability, and automate shift assignments.
Plan schedules at least two weeks ahead and build in flexibility for unexpected sick days. Rotate shifts to maintain fairness so the same employees aren't always the ones working extra hours.
2. Be Strategic in Using Overtime
Overtime can be useful when you need to meet deadlines in a short amount of time or handle a temporary spike in work. Be strategic in using overtime rather than keeping it as a routine part of operations. Otherwise, employees may begin to expect it as a regular part of their income, which can make it harder to reduce later. Overworking employees can also lead to burnout and errors.
Require manager approval ahead of time if an employee attempts to work beyond regular hours and only approve when it's truly necessary. You might even consider creating a rotating overtime pool, allowing different employees to volunteer for extra hours.
3. Assess Your Company's Workflows
Assess your company's workflows to help evaluate your need for employee overtime. "The root causes of overtime are inefficiency and poor workflow management, which means the first step in addressing overtime is to reexamine your workflows," says Dean Mathews at Recruiter.com.* "What do employees do during the day, starting from the moment they clock in? Are excessive status meetings taking too much time from real productive work? What other distractions are sapping your staff’s focus? Prepare a list of your current processes and policies. Review each one to see how effective it is. Modify or create new ones where necessary. Do a time-and-motion study on the workplace to see if everything flows the way it should."
4. Maintain Compliance
Stay informed about applicable labor regulations related to overtime. Requirements can vary by state, industry, and employee classification, so review official resources to confirm what applies to your business. Accurate recordkeeping and adherence to relevant standards are important for avoiding penalties and maintaining fair practices.
5. Track and Analyze
Track overtime like any other business expense. Analyze numbers to help make informed decisions about staffing and workflow improvements. Review data monthly or quarterly, and break it down by department, project, and individual employee to identify patterns. Determine if overtime spikes in relation to certain clients, deadlines, or managers. When you figure out the causes, you can determine the proper solutions.
6. Cross-Train Employees
Make sure employees are cross-trained so one or two employees aren't the only ones who know how to perform certain tasks and therefore must stay late to complete them. "A 'single point of failure' is part of a system that will bring the entire system to a halt if it stops working," says Sam Lovhaug at When I Work.*** "If one employee is the most skilled or has the most experience, they’ll likely be the ones picking up all the slack. If you notice one employee earning the most overtime or if they’re the only one who can do the job, burnout is already on its way. What would happen if that employee called out sick? What if they take a vacation, or take a new position and leave your business? Spreading out responsibilities and specialties amongst your whole team is another way to reduce overtime. Instead of relying on a single skilled employee, train other team members to step in and pick up the load."
7. Take Employee Mental Health into Account
Employee mental health is critical, and too much overtime can lead to its deterioration. Long hours can take a toll on anyone, and fatigue is likely to lead to errors and burnout. It may even lead to accidents with certain jobs. For everybody's mental and physical safety, keep overtime under control. It's also a good idea to encourage breaks and paid time off. If someone is frequently working extra hours, even if you're okay with it from a management standpoint, talk to them about your expectations as they may be working extra hard out of loyalty or self-imposed pressure. It may help to reassure them that their accomplishments during regular hours are sufficient.
Managing overtime can help reduce costs, but it can also lead to a more efficient and healthier work environment. Consider the tips above to help you find the right balance.
* https://www.recruiter.com/recruiting/11-ways-to-keep-overtime-costs-down/
