Overtime is a problem for both companies and workers. It often feels like the only option you have to meet productivity demands, but it comes at a high price. Several studies provide clear evidence that overtime is counterproductive. One study found that a 10% increase in overtime can reduce productivity by 2.4%.
The little boost you get by burning the ‘midnight oil’ is at the cost of the energy of the workers, which affects their overall work routine. It is not to say that you cannot schedule occasional overtime to meet a deadline. Just if the company has a sustained reliance on expensive employee overtime, it is a reflection of poor management.
In this article, we will explore how to reduce employee overtime strategically. We share some tips that can help you deal with overtime.
Six tips to reduce employee overtime
1. Take meetings when only required
Team meetings are helpful but not always the best use of your workers’ time. When sitting in a meeting room, employees often lose a chunk of their time when they have only a few minutes of project updates to share. The rest of their time is spent on their phones. For the blue-collar workforce, it means not calling them for meetings often from the production floor. This wasted time is better utilized in accomplishing real work. Your company should adopt innovative ways to consider project updates instead of meetings. Digital work management and task management tools like Asana and Jira are best for automated communication between employees and management.
2. Your employees must have proper tools and training
Reducing overtime is more about maximizing the output of regular employee hours. The rule here is to work smarter, not longer. Surprisingly, an average worker spends more than a quarter of their day just reading and answering emails at work. It is just one example; several similar day-to-day tasks occupy your team’s time. You have to ensure that your workers are performing their duties correctly. Email automation allows you to respond instantly to customer queries instead of mailing them one by one. For employee training and onboarding, you can also use self-paced programs so that workers can learn at their pace and get better at their jobs. For manufacturing and construction industry it requires replacing manual tools with automated devices such as replacing hammers and forging tools with power tools.
Most companies do not know how to decrease overtime, and they keep looking for better and more significant ways when small things can add up and reduce overtime. To maximize productivity within the available work hours, you must ensure that your workers have the tools to do the best work. If workers spend their time troubleshooting old equipment, it leads to poor efficiency; so you need to provide them with new tools.
3. Create an overtime policy
As a manager, you can quickly moderate the overtime the workers put in by clearly specifying the policies that ensure work-life balance. Some of the most successful companies offer great benefits like flexible work schedules, remote working, and unlimited paid time off to give their employees greater control over where and when they work. In the absence of an overtime policy, employees are not sure what the company’s stance is about overtime. This usually defaults to a workaholic mindset where workers assume that working longer hours with getting them promotions and better compensation. You have to ensure that workers do not develop such a mindset.
4. Allow flexible work schedules
In a post-pandemic era, it is clear that work-life balance is most important for workers. Flexible work schedules allow employees to attend to critical personal duties like kids, aged parents, or illness. Flexibility in work schedules will enable them to take care of their responsibilities without taking offs or working overtime.
5. Cap overtime hours
There are no federal limitations on how much overtime a worker can work. While there is no legal framework, employers are within their rights to cap overtime hours. Overtime might be inevitable, but it doesn’t have to stress the labor costs to the extent that it starts eating up profits.
A comprehensive overtime policy can determine the workers’ week, month, and even annual overtime hours. You can keep the policy flexible to have room for extra hours in case an employee is required to work more overtime. Capping overtime is the best way to ensure that work gets distributed more evenly amongst the workers so everyone can work overtime hours.
6. Use time-tracking software to track overtime
Once you have a constructive overtime policy, you can use automated employee time and attendance tracking software like Truein to ensure all policy guidelines are followed.
Truein is a cloud-based face recognition attendance system that also features automatic overtime calculation. It is a hardwareless software that can be deployed directly on smartphones to start recording attendance and overtime.
Overtime management is essential to reduce labor costs. We hope the tips listed here will help you reduce overtime and increase productivity within the workforce.