Overtime Cost: Manage and Reduce Them Using These Tips

A Collection of Articles About Overtime Costs

Overtime can cost you a lot of money in wages. Imagine a plant with 1,500 employees all getting overtime. How much will that affect your operating costs?

There are issues to consider when paying overtime. For example, can the overtime be avoided? Or not? Some companies have no choice, their ordering procedures vary, and the customer may place an order for same-day shipping. When that happens, you need your workforce to say longer to complete the order, and your employees are paid overtime.

Other times overtime is because of poor planning or because of reduced productivity. In some cases, it may be a way of keeping your employees happy and loyal. I can see this for labor-intense jobs that are difficult to fill, and one way of attracting a workforce is to offer overtime.

A critical part of paying overtime is identifying whether it makes financial sense, whether it’s to attract a better workforce or to fill customer orders.

If you pay overtime due to poor planning or productivity, you can make a difference by addressing those issues. Naturally, the first step is to acknowledge there is an issue; second is to find the root cause of the problem so that you can work towards a solution.

In this post, you’ll find a collection of resources that can help you manage and deal with overtime. Before you get to those resources, look at the ten tips below that I came up with to prep your thinking regarding the overtime you’re paying.

10 Tips To Manage Overtime Cost

1. Identify why overtime is needed.

2. Eliminate activities that waste time in your workforce.

3. Look at automating tasks that take a lot of time to complete.

4. Ensure you have the right people doing the right job.

5. Track employee performance to identify possible problems.

6. Monitor breaks and time in and out.

7. Use a staffing agency when demands peak.

8. Use project managers to push efficiency and reduce wasted time.

9. Communicate costs with employees and stress success depends on keeping costs down.

10. Ask for feedback from employees on how to improve efficiency.