How Productive is Overtime?

How Productive is Overtime?

Remember when a productive work week was capped-off at 40 hours? It seemed that all your work could be accomplished in that time. In recent years, however, increased overtime has become a steadily rising trend in the United States. Today’s average work week for employees is 47 hours and 40% of workers report that they work more than 50 hours. This adds an additional 7-10 hours of labor cost for the employer. Along with this labor cost, these additional work hours are creating overwhelmed employees that are not being as productive as they can be. These additional hours are viewed as a necessity to accomplish the tasks at hand, but could the tasks get accomplished in 40 hours without having to endure unexpected, and unnecessary, labor costs?

Is Overtime Productive?

Unfortunately, the research indicates that overtime is not productive. CNBC recently shared research that shows a steady decrease in productivity once an employee has hit 4o hours in a week and a sharp decline when the employee hits 50 hours. From this research, they were able to establish that an employee would not be any more productive by working excessive hours that resulted in unnecessary labor costs. If we are noticing that overtime is unproductive, then why are we continuously still seeing overtime increasing?

One major leading cause, according to Forbes, is the peer-pressure from upper-management. Though upper-management may believe that it’s beneficial to encourage employees to work extra hours, consequently, it’s producing a less effective workplace. Along with the peer-pressure of upper-management, we are constantly seeing the Fear of Missing Out, or FOMO, causing employees to “work” extra hours without actually getting anything done.

As a result of this unnecessary overtime, employers are seeing their staff getting burnt out, distracted, and overall less efficient. These results bring a negative impact on the workplace and put a halt to creativity. Luckily, there is something that can be done about this.

The Happy Medium Between Overtime and Productivity

A large part of what will make for a more productive employee is the direct relation of how many hours an employee has worked. Chron found that once an employee has exceeded the average hours worked in a workweek, they will have little motivation or encouragement from upper-management, and will typically become less productive. When management focuses on motivating their employees, they see remarkable results in regards to the quality of work produced. Deloitte recommends that to diminish nonproductive employee hours, management can publicize flexible work policies, get input, and lead by example. By management putting these factors into effect will allow for a less overwhelmed, and more productive, employee. Another factor that employers normally put on the back burner is the focus on their employees’ work-life balance. CNBC recommends that by encouraging a strong work-life balance, your employees will be motivated to work productively while still being able to make it home for dinner.

Productivity in the workplace is essential. When you have an overworked employee you will evidently see less results. One of the most essential ways to ensure that your employees are motivated and productive is by consistently maintaining company morale and engagement. Proactively monitoring labor costs and productivity can enable managers to recognize good patterns, and bad ones, and develop strategies for increasing efficiency. Some Time & Attendance software tools will even send alerts to managers when an employee is in or approaching overtime, so that they can appropriately address it on a case-by-case basis. With that being the case, the question now shouldn’t be, “Is overtime necessary?”, it should be, “What will I do about my unnecessary overtime?”

This DATIS Blog was written by Carlos Lozano, DATIS, on April 13th, 2016 and may not be re-posted without permission.

Written by Carlos Lozano