Is overtime worth it?

Organisations pushing to increase productivity through overtime could be doing more harm than good.

BY Cameron Edmond 19 Aug 2013

Currently, more than one quarter of employers report their staff are working overtime, with 62% confirming that the extra hours are going unpaid. Although this may be an attempt to increase productivity while keeping headcount down, an expert warns this isn’t the best solution.

For 2013’s Hays Salary Guide, 1,600 employers were surveyed regarding the amount of overtime their staff undertook over the past year. While 11% stated they had been able to reduce the amount of overtime, 63% said it had remained steady. Twenty-six per cent found the amount of overtime to be increasing. In some cases, this was an increase of more than 10 hours per week.

This extra workload on employees runs a high risk of workplace stress and burnout, warned Nick Deligiannis, managing director of Hays in Australia and NZ.

“There could be a very good business case for adding permanent headcount or using a temporary staffing solution instead and there are some fantastic candidates available right now,” Deligiannis said.

Deligiannis warned that the increase in stress and burnout can result in a rise in absenteeism. Coupled with the mental illness caused by burnout, this could cost employers significantly more than they are attempting to save through the overtime.

Key HR takeaways

Occasionally, overtime may be a necessity. As such, Hays suggested a number of methods employers can use to keep engagement high and reduce stress:

Monitor and measure: Keep a close eye on the amount of overtime team members are performing, and if this is correlating with an increase in absenteeism or a decrease in employee wellbeing.
Consider raising headcount: If your staff are not responding well to the rise in overtime, you may need to bite the bullet and increase headcount. This will most likely decrease absenteeism and turnover while increasing productivity. This may be permanent, or you may be able to simply use temp employees during times when higher productivity is needed.
Use feedback: Actively encourage all managers to provide feedback to staff – this can include paid and unpaid rewards, as well as simply recognising the employees for putting in overtime.
Monitor business activity: By keeping on the pulse with the activity of your business, you can build a better relationship with your employees. If they understand the nature of the work, they may also be able to gear time off around slower periods.