Possible Solutions for High Overtime Hours and Cost

3-5 Minutes to Read

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.