Overtime isn’t necessarily bad. In fact, it can help organizations through treacherous times and is a great way for manufacturers to buckle up and meet variable/ seasonal demands for their products or services. But all the advantages are only for organizations that can effectively keep overtime under control. Overtime can also be the death of a company if it’s not implemented correctly. It’s all about your HR department’s expertise and the overtime management strategy utilized.
Using Overtime Strategically!
Effective overtime management can create flexibility and practically pays for itself. Overtime management is the perfect way of ensuing optimum inventory levels while also maintaining exemplary customer service. The more on-demand production environment efficiently handles any sudden spikes in demand giving your company the ability to compete more aggressively. Overtime can translate into lower prices and shorter lead times, making it a valuable business tool.
But How Much Overtime Is Too Much?
The amount of overtime contributed by each employee may be limited by the health and safety conditions that dictate your industry. Or the terms for overtime work may be dictated in your employees’ union contract. Whatever the case may be, management must understand the negative impacts of too much overtime and limit the time worked by everyone, ideally to no more 53 hours each week.
Planning Your Approach to Overtime Management
If overtimes are a frequent occurrence in your company, it is a good idea to start off with an overtime audit. This audit will let you exactly how many hours are overtime each month, which employees are willing to benefit from it regularly and if they have come to expect it as a regular part of their income. An overtime audit will help you realize the economic and cultural importance of overtime within your organization.
Analyze how overtime is currently used, both economically and culturally. How many hours of overtime are used per month? Which employees take advantage of it, and how effectively? Has it become an expected part of their income?
Use the results of the audit to find out the major periods of time when overtime becomes a necessity and plan accordingly. Creating a formal strategy to combat the occurrence of overtime will make it a less stressful and more streamlined process at your workplace.
Setting Limits to How Much Overtime Each Person Gets
In each organization, there are few employees who are always willing to share the burden. They voluntarily agree to work overtime. But letting everyone work as much as they want to, will not only drive your overtime costs insanely high, but it will also affect their health. It may also lead to motivational issues due to being completely burned out.
Experts agree that for shift workers, 300 to 350 hours worked per year are reasonable enough for overtime.
It is also a good idea to conduct an organization-wide survey, asking specific questions about how overtime can be better handled at the office. It will let you understand how the majority feels and may even help you score some innovative strategies to enhance your organization’s overtime culture.
Also consider the reasons your organization needs overtime frequently. Consider investing in new hires if these reasons aren’t going away anytime soon. Let the overtime costs go towards training to ensure that you have well-trained staff ready to take on the future with you.
Overtime can be more expensive than hiring, and even if they cost the same for your organization, there are also the hidden costs of overextending employees. So it is a good idea to hire when going overboard on the overtime!
In a unionized work environment, union contracts usually dictate the overtime rules. But you can effectively control overtime costs with unionized staff as well by using principled negotiation tactics and integrative bargaining skills during the contract talks.
If you are facing difficulties implementing a satisfactory overtime program, maybe WorkTech can help. Contact us today to learn more.