“Time is money, especially overtime.” Larry Wall
There is a lot of preconception that working overtime is something extremely negative. It’s popularly seen as a form of abuse done by the employer against the employee.
But have you given the change to the other way of thinking? Overtime does not have to be bad if the employee desires it and if the business adequately compensates them for the work.
It’s true. People usually do it because they have to: due to poor time management, unrealistic expectations, or workforce deficit. But it can also be different. People are choosing to do it to gain flexibility or to pump up their income. Therefore, if the overtime is not imposed by the employer abusively, it can turn into a win-win situation.
In the following lines, we will cover all you need to know about this topic: what qualifies as overtime, the pros and cons of working overtime for both parties, when it becomes bad for business, and how managers can control overtime.
Table of contents
Working overtime is explained as working any additional hours that surpass the usual scheduled working time, meaning more than the 40 hours week limit. Every country has its legislation regarding this topic, and the main objective is to prevent employers from forcing their employees to work excessively long hours.
It’s worth mentioning that in Europe, the European Union's highest court ruled (in May 2019) that all employers must track the time and attendance of their employees.
If we look over to the United States, overtime compensation is set at a rate of at least 1.5 times the employee's regular pay rate, also known as "time and a half."
Among the most important causes that cause employees to work overtime in business of any size, we can mention the following arguments:
All these are images of poor management skills and poor leadership. Letting these causes escalate will bring resentment from the employees, lack of motivation, lack of engagement, and mistrust.
Working overtime brings both advantages and disadvantages. Let’s look in more detail at effects such as pay, career, or productivity on the positive side, and drawbacks such as health, stress, fatigue, and work-life balance.
A study by Industrial and Labor Relations, Institute for Workplace Studies- Cornell University shows that approximately “10% of US employees who work 50 to 60 hours per week report severe work-family conflicts.” The same report highlights that “the number jumps to 30% for those who work more than 60 hours. The divorce rate also increases as weekly hours increase. These factors contribute in turn to mental health and alcohol problems.”
Find below three reasons why overtime is bad for business:
You could be paying more money for less productivity since many employees are not that productive after a specific time at night, and overtime could cost more than regular working hours.
Excessive overtime can very well lead to a high level of absenteeism due to fatigue or poor health.
If we are talking about constant overtime, this will generate chronic stress and eventually burnout. Having employees reach that level will lead to higher turnover rates.
Overtime is bad for business when it is too much, done too often, and as a result, employees can never make plans with their loved ones.
Managing overtime is extremely important, as it can increase the costs within your business unplanned and cause disfunction within the overall finances, plus it can hurt some of your best people. Find two ways that will help to approach this challenge:
Overall, while overtime can be beneficial for both employer and employee, it has some downsides, and every company should balance the pros and cons. But always make sure you avoid imposing this on your employees and offer proper compensation in return.