Stop, Look, and Listen: A 3-Pronged Strategy to Keep Overtime Costs Under Control

6th September 2019

While not everyone isn’t lucky enough to experience the utopian 4-hour work week, working more than the prescribed full-time 40-hour work week shouldn’t be the norm either.

As it turns out, overtime work is more widespread than it is rare.

A survey commissioned by TotallyMoney revealed that on average, workers in the United Kingdom put in an average of 10.1 overtime hours per week. Less than 50% said that they leave work on time while almost 10% put in more than 30 hours of overtime per week.

The same survey reveals that 53% of employees who work overtime do so due to too much work and only 11% spend more time in the office because they love their jobs.

Overtime Pay Not Required, But There are Other Costs Involved

The UK Government does not require businesses to pay their employees for overtime, but the law states that the workers’ average total pay for the total hours they logged should not fall below the National Minimum Wage. 

According to the Trades Union Congress (TUC), in 2018, UK employers recorded 2 billion hours in unpaid overtime work, representing 18% of all overtime hours. 

TUC’s General Secretary Frances O’Grady explains: “Overworking staff hurts productivity, leaves workers’ stressed and exhausted and eats into time that should be spent with family and friends.”

Overtime work is a double-edged sword as it exacerbates both presenteeism and absenteeism. Presenteeism due to excessive overtime work costs the UK economy £15.1 billion annually while absenteeism is a profitability leak costing businesses £8.4 billion.

The overtime-related decline in productivity is likewise costing the UK economy £40.2 billion and is expected to rise to £47 billion by 2030 if left unchecked.

Excessive overtime can hurt businesses in several ways. Sadly, since it has become rampant, many businesses and workers have started to accept it as an inevitable norm associated with the modern workplace.

You need to take proactive steps to rein in overtime costs before they put your organisation at a higher risk.

When we were kids, we were told to stop, look, and listen when crossing the street. You can use the same basic teaching to help you keep overtime costs under control.

Stop Workplace Practices that Encourage Overtime Work

Deliberate or not, there are certain things in the workplace that compel workers to work beyond the clock. The first step to keeping overtime costs under control is recognising these workplace practices and nuances that could be encouraging employees to work more than the optimal number of hours. 

There’s a long list of things in the workplace that can create an overtime culture. Here are the common ones that you should keep an eye out for:

  • Rewarding People Who Work Long Hours

If you’re incentivising employees (i.e. giving promotions) who are putting in the extra hours, expect your other employees to model the same behaviour. Instead of rewarding availability, reward productivity and performance.

  • Holding Unscheduled Meetings After Hours

FOMO or fear of missing out is a real phenomenon affecting people in all aspects of their lives, including their professional one. They don’t want to miss things at work and jeopardise their careers. Holding important impromptu meetings after office hours is a sure-fire way to encourage unnecessary overtime among employees.

  • Leading by a Bad Example

“If my boss doesn’t leave work on time, why would I?” Often, the culture of overtime trickles from the top. Employees seeing their managers working extra hours would be hesitant to leave work on time. If managers and organisation leaders can manage their time well and are able to leave work on time, it will create a positive ripple effect across the workplace.

Again, these are just a few of the workplace practices and corporate culture nuances that could encourage employees to do overtime work. Eliminating these can have a significant impact on reducing your company’s overtime costs.

Look for Productivity Bottlenecks

Going back to the survey cited above, the biggest reason employees clock in overtime work is too much work.

In sales and marketing, there are concepts called true value and perceived value. True value is the actual value of a product or service. Perceived value is the value that customers associate with a product or service and can either be lower or higher than the actual value.

We believe the same thing is happening in the modern workplace.

Employees saying that they are doing too much work can be true, especially for organisations going through a growth spurt and expansion.

However, the feeling of “too much work” can also be perceived because of inefficiencies in your systems that in turn create bottlenecks in your workflows.

Here are a few examples:

  • Unnecessary Meetings

Getting together for brainstorming sessions, status reports, and business planning is crucial for any organisation. However, the modern workplace is also notorious for being beleaguered with unnecessary meetings. In a survey involving professionals in the UK, United States, and Germany, 44% of the respondents agree that “poorly organized meetings mean they don’t have enough time to do the rest of their work.”

  • Micromanagement and Long Approval Process

If you’re finding yourself having to get involved in every step of the way, you’re slowing down the progress of tasks and projects. The intention to be hands-on may be good, but the results are usually negative. 

  • Too Much Time Spent on Administrative Work

Answering emails, filling out HR forms, accomplishing manual timesheets — all these are necessary administrative tasks. However, they create problematic productivity bottlenecks for your employees. They either do these tasks during their regular work hours and extend their stay in the office to accomplish their mission-critical tasks or vice versa.

One of the keys to unclogging your productivity pipeline is using technology to identify where the blockages are happening.

For instance, a time clock software not only tracks time for payroll purposes, but it also gives you both a bird’s eye view and a granular understanding of how your employees are spending their time. Automated tracking means there’s no disruption to how employees go about their day-to-day tasks. Easily accessible reports also allow you to quickly and accurately identify productivity bottlenecks that need to be resolved.

Listen to Workplace Sentiments

Your workers will manifest symptoms of putting in excessive overtime in different ways and it’s important to “listen” to these signs. Here are a few:

  • An organisation with a culture of overtime will have high attrition rates
  • Increased absenteeism due to sickness
  • Low job satisfaction scores in internal surveys
  • Increase in the number of conflicts among peers and between managers and their subordinates
  • Declining quality of work
  • An overall negative workplace atmosphere
  • A decrease in customer/client satisfaction

We can go on and on, but the key takeaway is this: an overworked workforce produces subpar business results. You need to listen to these workforce sentiments and always consider overtime work as a potential culprit when solving these issues.

Don’t Let Overtime Costs Go Overboard

External factors are pushing organisations to beat tighter deadlines than ever before. While some overtime instances are necessary, several can be controlled with the right leadership, culture, technology and productivity management.

Less overtime creates happier/healthier employees which leads to better business results.