Employee overtime is a huge pain point for business owners, considering how much it costs. In the United States, the private industry loses an average of $38.07 per hour due to time infractions in the workplace.
Overtime cost tends to grow out of proportion with time. It’s easy to lose sight of the big picture and fail to take action. This is why it is recommended to act immediately at the developing stage.
In this article, we discuss the top six best practices you can implement now to reduce overtime costs in your business.
Train Your Staff
It’s easy to say that employees should be trained in the best ways to get their jobs done, but many businesses fail to make training part of their routine. Luckily, when you make training an integral part of your culture, it becomes easier to reduce overtime costs. This is because employees can get tasks done more efficiently and effectively with less supervision from management.
Training can be done with software that tracks employee efficiency or through onboarding and ongoing training programs.
Use a Time Tracking Software Tool
The best way to reduce overtime costs is to implement a time tracking software tool. You can use it to see how much time each employee spends working on projects or tasks so that you can better distribute their workloads if necessary.
Besides, you can easily see which projects or tasks take longer than expected and adjust accordingly or ask for help from other more qualified employees if needed.
Establish a Clear Policy for Overtime
Overtime policies are essential for all companies. They help set expectations for employees and employers alike, while also preventing confusion about when employees should work extra hours or not. When implementing overtime policies, ensure that they highlight the standards of operation.
For example, they can include how much time employees can regularly work, when they should not work overtime and how management will approve it.
Additionally, the policy should also include provisions for what happens if an employee exceeds their allotted hours or requests additional time off during periods of high demand.
Improve Employee Scheduling Practices
Another excellent way to prevent overtime is to avoid it in the first place. The best way to do this is by having a well-designed schedule that accounts for your employees’ time and workloads.
Schedule employees properly by putting them on the right shifts and ensuring they have enough hours during their transition to complete all of their tasks.
Improving your scheduling practices also helps to reduce unplanned absences while increasing efficiency and productivity throughout your organization. Even so, this can be tricky because it may involve changing your business processes and culture, but it’s necessary if you want to save money on overtime costs.
Assess Your Workloads
You can’t eliminate overtime if you don’t know how long it takes. Get accurate data on your current overtime usage, then create a plan to reduce it by eliminating unnecessary or unwell-defined tasks.
Start by assessing your current workloads. How many projects are in progress at one time? Is there a way to reduce the number of projects in progress? How many hours do employees spend on each project? Is there a way to reduce the number of hours spent on each project?
If you have multiple employees working on one project, can they all share a few tasks or take turns completing different tasks so that they don’t all need to be working simultaneously?
One of the most effective ways to avoid overtime is to plan for it. If you know that a particular project is due to start at a specific time, then start planning for it beforehand. Don’t wait until the last minute – you’ll only pay more in overtime costs.
By identifying tasks that require additional time and adjusting schedules accordingly, you can eliminate the need for employees to work extra hours.
For example, if you know that a particular task takes more time than usual and will likely require more people to complete it on time, schedule those tasks during off-hours or on weekends so they do not interfere with regular work schedules.
Overtime costs can be a very frustrating expense for any business owner. As if that’s not enough, working overtime can lead to burnout and health problems for employees.
The good news is that you can significantly reduce the costs involved by implementing some of the best practices that we’ve discussed in our article.
Some of them may be easier to implement than others, but all should help save your business a good chunk of expenses. We hope you can now create a solid plan to keep your overtime costs at the minimum after reading this. Good luck!