THE HIDDEN COST OF OVERTIME
How do you utilize overtime on a job site?? What is your company’s guidelines about working OT in the field?? Some companies use it in different ways:
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??????????? Catch up schedules when you or your customer is behind
??????????? Reward employees for getting in 40 hours (or withholding it if they don’t)
??????????? Retain employees threatening to go to another company
??????????? Supplement 40 hours because you have more jobs than you can man
??????????? It’s a hard money job and the customer will pick up the premium
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No matter how you use it, it is costs you way more than you realize.?? WAY more.
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To the workers, OT is as much a mental mindset as it is a financial issue.? Most of your workers love overtime and have no idea how expensive it is.? And they don’t care.? To them, it’s a dopamine high.
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There are multiple studies you can find online that chronicle the additional costs of overtime beyond the money; they are called Inefficiencies and come in a few different forms.
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PRODUCTIVITY
It is well established that working overtime SIGNIFICANTLY and MEASURARABLY reduces productivity.? We are all kind of ‘geared’ to the 8 hours a day, 5 days a week, 40 hour work schedule.? When workers go beyond that, fatigue starts to set in.? Some companies believe in a 4/10 schedule, and even that has been shown to reduce output because workers just seem to be less motivated those last two hours.
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Productivities start to dimmish beyond 40 hours, regardless if it’s 4/10’s, 6/8’s, 5/10’s, or more.? Seven days a week is stupid inefficient.? People just get tired and less productive.? The research and tables support it.? The second factor about productivities is the length of time the OT persists.? Productivity loss compounds the longer the scheduled overtime runs.? Work OT for two weeks – you might lose 15%.? Work OT for six weeks – productivity loss might hit 30% to 40%.
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OTHER LOSSES
Overtime also increases absenteeism, mistakes, poor work, and the worst – safety issues.? Tired people lose focus and forget to pay attention to their work and conditions around them that can put themselves and other workers at risk.? What does one recordable cost you?
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Sometimes additional hours are just necessary, but use OT sparingly and grudgingly.? Even if the customer is willing to ‘pick up the premium’ they are not covering the loss of productivity, and you are losing money.
Overtime is something many companies require to cover production demands. However, when a company continuously uses over time, it can indicate several issues, such as: -Inadequate Staffing Levels -Poor Planning -Project Management Therefore, it's important that project managers focus on strategic workforce planning and effective resource allocation to prevent over-reliance on overtime. This includes accurately forecasting project needs, setting realistic deadlines, and ensuring that the team has the right mix of skills and numbers to handle the workload.
Supervisor,SSHO,QC Specializing in Industrial and Commercial duct design and coordination
1 年Lucky to have an owner that hates O/T. He knows his people need down time and likes them to have it. We do work O/T as jobs require but try and keep it to a minimum.