Possible Solutions for High Overtime Hours and Cost

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Exploring Motivation as a Possible Solution for High Overtime Hours and Costs

When a manufacturing facility’s productivity drops, it can often lead to extended time requirements to complete projects. As you might imagine, this makes employee costs soar as high overtime hours and higher pay start becoming a standard. But what if you could motivate your employees to complete the required work within designated work periods? With suitable systems in place, and an adequate workforce and training, finishing projects before overtime is necessary might not be as hard as you think. At least not when you are giving employees the attention they need to be successful.

To save your business time and money, it is important to know how to properly motivate your employees to achieve the desired outcome. However, this might be tricky the larger your organization becomes since different things inspire everyone. It is vital to create an incentive package and focus on fringe benefits your team members are most interested in for the best results. With these systems in place, they will be more motivated to work within designated hours and effectively avoid overtime periods.

How Can Motivation Reduce High Overtime Hours and Costs?

Most managers will take advantage of reward/punishment systems in the modern work environment. Under these systems, administrative teams will provide great incentives whenever success is achieved and reprimand failures. Unfortunately, this method focuses too heavily on external stimuli and typically is not considered highly effective when trying to motivate employees to fulfill job duties within a designated period.

According to a recent Gallup poll, approximately 30% of people achieving a salary of $36,000 or less are emotionally engaged at work. While this may immediately equate to “low pay = low engagement,” engagement drops to 28% when looking at people that make between $36,000 and $90,000. That means even the highest-paid workers are not as engaged as you might think they should be. The key takeaway from this study is that money is not the answer, and businesses must be creative in the ways that they motivate their employees.

When overtime needs to be offered, make sure that employees can voluntarily shoulder the burdens if possible. This can help ensure those team members that are already stretched thin are not required to keep working outside of the regular hours they are considered accountable for. Even when voluntary overtime is taken on, businesses might still consider defining individual overtime limits to control costs and ensure motivational problems do not become prevalent. According to most experts, limiting annual overtime hours to 300 to 350 per employee is considered reasonable.

If you are struggling to maintain employee motivation during periods of necessary overtime, Certified Source can help. Through our performance-based staffing services, we can help not only ensure that you have adequate headcounts to achieve internal goals, but we can also ensure that team members remain motivated through rotational job placement opportunities. Our goal is to ensure that employee burnout is addressed before it becomes a problem that leads to turnover or poor engagement levels.

employee speaking at phone while working at laptop late at night

Exploring Risk Management Programs as a Possible Solution for High Overtime Hours and Costs

Many manufacturers are struggling to deal with a real challenge threatening the industry – high overtime hours and costs. In recent years, overtime expenditures have skyrocketed. But allowing team members to work excessive overtime carries risks. From an overstretched workforce to poor time management, there has never been a more critical time to ensure your risk management programs address high overtime hours and costs.

Effectively using overtime requires a complete understanding of possible risks and possible adverse side effects. When this approach leads to burnout, high turnover, unrealistic customer expectations, or the development of toxic company culture, the effects can be devastating long-term. With an appropriate risk management program in place, high overtime hours and costs can be reduced to a manageable level to still provide employees with the opportunities they are looking for while maximizing employee satisfaction and compensation. But what does an excellent risk management program for high overtime hours and costs look like?

How Can Risk Management Programs Reduce High Overtime Hours and Costs?

Risk management programs designed to reduce high overtime hours and costs should include a variety of crucial facets, including process reviews, ongoing monitoring, and internal controls. Since the financial risks of overtime abuse can open opportunities for fraud or create vulnerabilities for a manufacturing facility, a solid plan should be a priority once high overtime hours and costs are observed. The sooner these problems are addressed, the more likely a facility is to limit financial or safety risks that could potentially occur.

One quick way to minimize high overtime hours and costs is to set daily or weekly limits on the amount of overtime an employee can take on. Allowable overtime can be based on precedence for safety and operational considerations. To take this approach further, some facilities will even require an overtime pre-approval process that requires supervisors to obtain pre-approval from their managers before overtime is even allowed. This will, in turn, strengthen internal controls and ensure that the risk management program works as intended long-term. Any risk management program's primary goal should be to review and refine its current programs to make the most impact long-term.

businessman work on laptop online in office
businessman work on laptop online in office

A final facet of a risk management program to reduce high overtime hours and costs is periodic reviews of overtime reports. This can help manage and monitor any expenditures related to overtime costs and will help further refine the risk management program in place. Continually sourcing and utilizing data will ultimately be the best way to ensure that you aren't paying exorbitant costs on single employees and may also signify that you aren't meeting headcounts. If you struggle to maintain your overtime hours and expenses, the team at Certified Source is here to help with performance-based staffing services designed to meet your unique needs and goals.

Setting, Tracking, and Monitoring Quality & Productivity Goals as a Possible Solution for High Overtime Hours and Cost

Cost efficiency is an integral part of running a business well. Although unexpected costs tend to pop up each month, it is imperative to establish procedures and protocols that help head off unnecessary spending. Goal setting is one way a company can align the focus of their employees, ultimately helping productivity and, ideally, lessening costs. You see, additional costs and overtime are one of the leading reasons that companies overspend.

Although some costs are unavoidable, it is possible to set your company up for success to lessen these. By setting, tracking, and monitoring quality, costs can be reduced. Additionally, this may help lessen needed employee overtime as well. Another thing that may help lighten the burden of high overtime hours and costs is focusing on goal setting and tracking. Whether a company has been in business for a few months or several years, they most likely have established some goals. These goals may range from setting quarterly resolutions to meeting a sales objective. Regardless, many available goal-setting and tracking tools could benefit your organization, ultimately leading to a cost-cutting solution.

Gantt Gantt Software Project And Digital Agenda Calendar

How Can Setting, Tracking, and Monitoring Quality & Productivity Goals Eliminate High Overtime Hours and Cost?

Overtime can occasionally be necessary, depending on your business and industry. Most of the time, high overtime (particularly when it lasts for an extended period) can produce several potential drawbacks. The first drawback is overtime dependency. It can be an issue when employees become reliant on overtime pay that is significantly higher than their regular compensation. Not only can this lead to a disproportionate number of new employees relying on overtime, but it is also not an equitable practice.

Another overtime issue is that research shows that long hours can generally lead to less employee safety. We know that sleep is vital to overall wellness, and too many hours on the clock dramatically affects this. Additionally, productivity has shown to be less with high overtime hours. Many studies have shown that marginal productivity slows when high levels of overtime are present. That is to say that although the total output is increasing, the hourly productivity is lessening. This could be from exhaustion, fatigue, work pace inertia, reworks due to mistakes, and fatigue.

When these factors are combined, it is hard to make a case for overtime unless necessary for a company. This begs the question, “what can be done to help lessen overtime?” This is where setting, tracking, monitoring quality, and establishing productivity goals can come into play.

First, companies should be sure to track overall averages of overtime as well as individual overtime hours. If it is high, consider hiring new employees to help lessen the load. It is also critical to determine if a certain number of people are doing most of the overtime hours or if it is spread out equally amongst the workforce. It isn’t necessarily a problem for only a couple of people to be doing the overtime as long as it isn’t excessive or too long-term. One way to help this is by establishing how many overtime hours each employee is allowed and ensuring that it is evident in the employee handbook.

Another way to help set and track goals and productivity is by using project management software. Many software options can help set, track, and monitor your company’s goals. Most prioritize goal tracking, cross-office communication, customization for each company, and milestone identification and monitoring.

Project management team updating Gantt chart schedule or planning on computer
Project management team updating Gantt chart schedule or planning on computer

Most project management systems have a tiered approach in their cost and what they offer. Many of these software systems come with other software integrations and various ways to customize them for your company. You may find that you like a software program that provides easy access to goal setting and progress monitoring. Other people may find that they prefer a program that emphasizes task management and communication.  Regardless of your choice, goal setting and tracking tools can significantly impact your business.

One of the main benefits of these programs is enhancing the productivity of your employees. Having clear goals established and a path to get to that goal makes it simpler for each team member to prioritize their daily tasks. Another benefit is the team unity that can be created. Research shows that teams with a common goal are nearly 4x more likely to stay committed to their company. You may find that confusion lessens substantially when using a project management system. Clear is kind, which can help your employees know what to do.

Utilizing a project management system makes it much easier to set, track, and monitor goals and quality control. When this happens, it is less likely that “redos” need to happen. More time can be spent on meeting the company’s goals versus continuously going back for damage control. This, in turn, can lead to lower needed overtime and, therefore, an increase in cost efficiency.

Certified Source is here to support you regardless of your goals as a company. By providing performance-based staffing programs to quality candidates, we can help ensure staffing of the highest regard for your company’s needs. No matter what metrics are causing your company to struggle, Certified Source can help connect you with the right people to fill vacancies and provide any other needed services. If your organization needs an effective and efficient staffing partner to help meet your goals, find your nearest Certified Source location today. We would love to chat with you!

Project manager working on laptop and updating tasks and milestones progress planning with Gantt chart

Development of Quality Teams as a Possible Solution for High Overtime Hours and Cost

When developing a quality company, costs can quickly add up. Many managers face the struggle of identifying and implementing cost-cutting measures. What if you could save money by adding, not subtracting? The good news is– you can! By developing quality teams, high overtime hours and costs can be reduced.

The development of quality teams can solve high overtime hours and costs. When teams are developed well, there is ultimately less need for overtime hours. In turn, this reduces the cost of overtime hours and can also strengthen the team. Most employees appreciate knowing how much time is expected of them, and reducing overtime can help establish a sense of consistency.

Leader and employees talking in office meeting room together, brainstorming, sharing ideas and solutions, negotiating on project

How Can the Development of Quality Teams Eliminate High Overtime Hours and Costs?

There are various ways to improve productivity without implementing stressful overtime work. Using efficient strategies and tools within your team can be immensely beneficial. Once upon a time, overtime was seen as an effort that could improve productivity, but now most people experience it as a stressful situation. Team leaders can easily find other ways to boost productivity. Crafting quality teams is one of these ways.

Many workers consider long working hours a top stress source amongst working individuals. The United States already averages working 38.7 hours per week per individual. Out of working individuals, 94% say they experience significant work-related stress. Overtime can undoubtedly be a factor that adds to these numbers. When you have overtime, your work-life balance is affected. While some individuals may not feel comfortable committing to overtime, they simultaneously don't feel comfortable saying no.

Additionally, working overtime has been proven not to improve productivity. One study showed that working even 10% overtime reduces productivity by 2.4%. Undoubtedly, overtime affects the exertion of a worker's energy.

Instead of spending money paying overtime, which is usually time and a half of a person's regular rate, why not spend that additional money and time investing in your local teams? There are a variety of ways that you can improve your team's productivity without adding on extra overtime hours.

First, consider evaluating the root causes of WHY you need overtime. Whether this is too much of a work burden, unclear job descriptions, or simply a lack of communication among team members, it is critical to identify the root of the problem. Quality teams also may consider using cross-training or task division. When using cross-training, employees use multiple skills across multiple jobs. Leaders can divide tasks this way and ensure that no employee feels burdened with too many tasks.

Group Of Young Programmers Sitting At Desks Working On Computers In It Office
Group Of Young Programmers Sitting At Desks Working On Computers In It Office

Quality teams also are mindful of how many meetings occur. Excessive meetings rapidly reduce employees' productivity based on how much time they take. Even quick meetings use the time that could be otherwise allocated. By being specific about the purpose of a meeting and sending an email or other memo when possible, you can save time for your employees, ultimately reducing high costs.

Overtime is a burden on companies as well as their employees. Instead of spending money to pay people to work extra, take the time to develop a strong foundation on which to build up your company procedures. Clear guidelines & expectations can streamline the processes, ultimately saving your company money.

Certified Source strongly values helping our employer clients connect with the best recruits in their area. Our performance-based staffing program can be used to help train qualified candidates. In turn, this ensures their ability to be impactful from day one. Quality Teams are crucial to the customer experience. When you develop these teams, you can ensure that your company remains cost-efficient and service-oriented. At Certified Source, we shine when filling needed vacancies with top area talent. If you need to add to your team- give us a call today! We would be thrilled to partner with you to fill your staffing needs. You'll swiftly and efficiently meet your goals when we join forces!

Enforcement of Attendance and Written Warning Polices as a Possible Solution for High Overtime Hours and Costs

Overtime is a topic that has been widely debated in recent years. While there are certainly times that overtime is needed, often it can be a vortex for business spending. Overtime can even cause long-term damage to your company. Some studies have even shown that if people work over 60 hours per week, they can experience a 25% decline in their productivity overall.  While some employees find overtime to help them earn more money or promotions, it can quickly lead to burnout and overwhelm.

In fact, there are over 120 countries that have created laws to restrict the number of hours a person can work each week. However, the United States is not one of these countries, and we are starting to see the results negatively impact businesses.  One way to avoid unnecessarily high overtime hours and costs is to create and adhere to an attendance policy. In addition, written warning policies can also help avoid high overtime hours and costs.

Group of multi ethnic corporate employees working in co-working open space

How Can the Enforcement of Attendance and Written Warning Policies Eliminate High Overtime Hours and Costs?

Businesses should have a consistent overtime policy to help streamline their processes. Overtime is employees' work time that goes beyond their regular working schedule. Incorporated in this discussion is also the compensation that accompanies overtime. It is easy to overlook how impactful overtime can be. The truth, however, is that it can take a toll on workers' health, well-being, and productivity.

Overtime can have quite a financial impact on a business. Although it is difficult to determine how much is spent in the United States on overtime each year, it certainly is significant. In 1938, the Fair Labor Standards Act was passed. Part of the Act states that any employee covered by the Act must receive overtime pay when they work over 40 hours each week. The act also says that overtime payment must be at least 1.5 times higher than the standard pay rate.

Not only can overtime impact finances, but it can also impact an employee's performance. Studies have shown a minuscule amount of work accomplished when working over 50 hours per week. Over time productivity can lessen, so even though more hours are being spent, less is being accomplished. In addition to performance issues, health problems can also arise when overtime is high. Work-life balance is a big topic of discussion currently, and there is no doubt that continual overtime can add stress to a person. Other health problems start to pop up when stress is prevalent, and absenteeism grows even higher. You may start seeing significant employee turnover due to increased health issues.

When it comes to eliminating excessive costs associated with high overtime, it is pertinent to look at a company's attendance policy. Considering the scheduling process is a proactive way to lower overtime costs. By ensuring employees' schedules are manageable, the hope is that these employees will be able to keep up with work and life outside of work. Sometimes it can be challenging to work everyone's schedules how they would like. Thankfully many software options and companies, such as Certified Source, can help with this.

businessman wear glasses looks at wristwatch checks time
businessman wear glasses looks at wristwatch checks time

While looking at scheduling, be sure to have a system to check employee availability. If you aren't being intentional with scheduling, you may find that overtime has snuck up on you or that employees are taking more absences than usual. Since some absences can't be avoided, it may also be helpful to cross-train your employees. This can help lower absenteeism, encourage efficiency, and help your staff become well-rounded.

Establishing a set policy for being absent can help ensure that employees are clear on the protocol. If more employees are present at their assigned work time, you run less risk of invoking overtime. In addition, employees' mental and physical health can stay sharper, and the stress level of those helping out in their absence may be lessened. If attendance is low, be sure to document the conversations and consequences in a way that is clear for both the employee and the superior.  With plans in place, high overtime costs are sure to go down.

As a locally trusted company for all of your go-to business staffing needs, Certified Source is available to help. Whether you are hoping to find and rectify company attendance policies or looking to staff your business, the experts at Certified Source are only a call away. We use performance-based staffing programs to place the best candidates in the area in an open vacancy within your company. By providing training from the start, our top-notch candidates are prepared for the first day of work to take on any tasks you may have with confidence and efficiency.