Overtime Costs: Part 1Published May 30, 2016
Overtime has its upsides and its downsides. On the positive side of the ledger, overtime can be used to meet unpredictable workload demands, eliminate the need to hire additional staff and increase employee satisfaction for those who want to supplement their earnings. On the negative side, when the use of overtime spirals out of control, it can lead to employee turnover or churn, low quality performance, and a big hit to the company’s profitability.
Overtime pay has existed for a long, long time and there are labour laws to govern hours, wages and overtime. Only a few employees are actually exempt from the right to receive overtime pay. Yet overtime costs can be a burden whether you run a big company or a small one.
Business owners don’t want to pay for overtime when it’s not warranted. However, not paying overtime when it’s legally required is something most businesses want to avoid just as much! There are strategies that can help business avoid the illegalities of not paying overtime when you should be paying for overtime. And there are strategies to help companies manage their overtime budget. Using creative compensation approaches like a fluctuating workweek pay structure is one strategy—this not only saves employers overtime costs but it makes for a better work-life balance because since it discourages employees from spending too much time on the job.
Can Punchtime help companies manage overtime and overtime costs? Yes, absolutely. Employers can easily see from the data capture when employees are working too much. If patterns emerge, you will be able to address the trends in a comprehensive way. By the same token, the real-time data will allow you to deal with overtime situations on the spot, when and as they arise with individual employees.
The subject of overtime has a lot of dimensions. We’ll pick up the topic again in a future blog. Stay tuned.