The Obvious Solution To Hidden Overtime Costs

Making your employees do overtime has a lot of implications for your business. There may be short term benefits of letting your employees stay late to finish the work that has to be finished, but have you ever thought about what this means for your business in the long run?

The direct costs of overtime are pretty clear, if you let your employees stay late, you usually have to pay them extra so it doesn´t take long to add up these costs. Paying 150% or even up to 200% of normal rates are pretty common for overtime and although paying a little extra might seem worth it to get things done, monetary costs are not the only costs associated with overtime. What about the hidden overtime costs, what are they and how can you avoid them?

Health effects of overtime

There are important impacts of overtime on your employees´ health, that might have a significantly longer negative effect on your business. The stress levels of your employees are usually directly related to the difficulty of work and the number of working hours. Overtime means both of these factors increase, meaning that your employees´ stress levels increase. High stress levels have a negative impact on one´s immune system meaning that the employee is more likely to get sick or, worse, to get overworked. Especially in the latter case, the costs for your business will increase significantly. Also, employees that feel weak, usually have lower productivity.

Productivity effects of overtime

Speaking of productivity, humans are not computers and it is well-known that human beings only have a certain number of hours they can be productive during a day. Employees are not made like computers to deliver non-stop. So, although it may seem that productivity would increase if your employees are making longer days (and have a larger earning potential which might motivate them), employees can not only abuse this larger earning potential and work slower to make overtime and earn extra money, but making longer hours won´t lead to positive effects on productivity because your employees simply can´t be productive for so many hours a day.

Safety effects of overtime

Working longer hours usually leads to less attention and concentration, leading to the increased possibility of making mistakes that could in some cases have serious impacts on safety KPIs and increase the risk of injuries.

The obvious solution to these hidden overtime costs

When overtime is common practice in your business, you need to think about these effects on health, safety, and productivity because they will harm your organization in the long run. If employees work too much for an extended period of time, there is also the chance this employee will burn out. Although everybody knows that overtime once in a while is necessary, it should be avoided on a structural base for the reasons mentioned above. The negative impacts on productivity, health, and safety will have long-term impacts on your employee turnover and competitive position.


However, there is quite an obvious solution to these hidden overtime costs: you can bring in extra staff to cover the additional workload. This could be through new employees or temporary employees, depending on how consistent the need for extra working hours is. A staffing agency can be your perfect partner to find these extra hands for either permanent or temporary workload. If you need any help thinking about how to reduce your hidden overtime costs and what you can do in your staffing strategy to avoid overtime as much as possible, we are always happy to chat!




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