5 Best Practices for Managing Overtime in the Workplace

Employee overtime is one of those workplace practices that can work both for and against a business. When time is tight, it can give you the extra boost to hit your goals. But left unchecked, it can snowball into burnout, low morale, and higher operational costs. While “time is money” is true, too much overtime can quickly become a financial and productivity killer for the business. That’s why managers need to get the balance right, use overtime without letting it harm the team or the bottom line. In this blog, we’ll look at the best ways to manage overtime, from tracking and analysing overtime data with Overtime Tracking Software to setting clear policies and creating a better work-life balance for employees.

What is the term "overtime management"?

When an employee works more hours than their usual working hours, it’s called overtime. Although overtime is good for both the business and the employee, poorly managed overtime can have downsides. Overtime management is therefore key to having a happy, healthy, and motivated team.

Why is it necessary to manage overtime at work?

Firstly, overtime management protects employees. Long hours without enough time to rest and sleep can cause physical and mental health issues that can harm employees and the business. 75% of employees agree that this generation’s level of workplace stress is at an all-time high, which leads to burnout. Employers can avoid this by monitoring overtime using Overtime Tracking Software, making sure employees take breaks, reducing absenteeism, and increasing job satisfaction.

Second, productivity may be increased by effectively managing overtime at work. Despite the fact that it may seem contradictory, working long hours can significantly reduce productivity. 

You may ask, why so? It’s because employees get tired and don’t focus as well as they would if they got enough sleep. But managers can increase productivity, reduce mistakes, and improve work quality by just controlling overtime and making sure employees get enough sleep. Plus, it helps companies manage labor costs. The truth is, overtime employees are entitled to more pay, which can result in a big increase in labor cost. So by monitoring overtime and employee work hours, companies can reduce labor costs, increase profit, and maintain a healthy bottom line. Overtime management has so many benefits it can also increase employee retention. Here's how:

Workers who put in long hours without getting enough sleep or recovery are more likely to quit. Managers may increase employee retention, lower turnover, and save money on hiring and training by controlling overtime and making sure workers have a good work-life balance.

How to Manage Overtime the Right Way?

Managing overtime at work shows that the company is looking out for its stakeholders, clients, and employees by following moral and just business practices. It also creates a productive, morale-boosting, and retention-boosting work environment where colleagues feel valued and respected. Here are some tips for effectively managing overtime that will help the business and its workers:

1. Establish Clear Expectations for Your Employee 

Many managers find it difficult to manage employee overtime, particularly when they don't have clear expectations for their employees. Here’s a tip: ask your employees questions and give them an explanation of the policy. The ultimate goal is to raise awareness on how to reduce overtime.

Step 1: Create a policy for the business

Creating a company policy that specifies what is expected of the employees in terms of overtime is the first step in controlling employee overtime. The following should be covered under this policy:

• What is the maximum allowable overtime?
• Under what circumstances is overtime permitted?
• What is the process for employees to request overtime?
• How will employees be compensated for overtime work?
• What methods will be used to track overtime hours?

Step 2: Inform your employees about the policy

Clearly communicating your company policy to all personnel is crucial after it has been developed. A note, email, or company-wide meeting can be used for this. The ultimate objective is to raise awareness about ways to cut down on overtime. 

Here's a tip: address any queries your employees might have and provide an understandable overview of the policy.

Step 3: Track overtime

Next, it's critical to keep an eye on their overtime to make sure employees are appropriately adhering to company regulations. Managers can obtain this information by asking coworkers to report their extra hours to them or by using a time tracking system.

Step 4: Resolve issues and update the policy

• If you see someone working more hours than allowed or without permission, take specific action to resolve the matter. Set up a meeting with the employee to discuss the matter and remind them of the company’s overtime policy. If the issue persists, take disciplinary action.
• To make sure the company's overtime policy is still applicable and effective, review and update it frequently. This might entail talking with team members or looking at overtime statistics to find areas that need work.

2. Prioritising your workload is underappreciated

• Workload prioritisation is a good way to manage overtime since it makes sure employees are focusing their time and efforts on the most important activities. 
• Workload prioritization can assist in managing employee overtime in the following ways:
• Determine which tasks are most important: Managers may determine which tasks are most important to the success of the company by prioritizing them. Managers can ensure that certain duties are finished during normal shifts and prevent overtime by focusing on them first. 
• Assign tasks that must be completed on the job: Managers can determine which jobs can be assigned to other team members using this method. Managers can lessen individual workers' workloads and help them avoid putting in extra hours to finish their work by assigning tasks to others.
• Mark time-wasting activities with a circle: Managers can see time-wasting or pointless tasks when they prioritize their workload. Managers may assist workers to work more effectively and lessen the need for overtime by decreasing or eliminating these tasks.
• Always plan ahead: Managers might use this tactic to schedule upcoming tasks and due dates. They may ensure that workers have enough time to do their tasks during regular business hours by doing this. This may lessen the likelihood that workers will put in extra effort to fulfill unexpected deadlines.

3. Offer Flexible Work Schedules

• Employers and employees can benefit in many ways from flexible scheduling. First, people with flexible schedules can manage their personal and professional lives better, with less stress and more job satisfaction. Allowing employees to work from home one day a week, for example, can allow them to pursue their hobbies or spend more time with their family.
• Additionally, it saves companies revenue on related expenses like greater administrative work and higher compensation while optimizing overtime management. Assume that employees are requested to work four 10-hour days rather than the customary five 8-hour days. Companies should not pay for additional overtime hours in this situation. Employees with more scheduling autonomy are actually more engaged and productive. By giving flexible schedules, employers can help their employees to be more productive and manage their time better.

4. Keep Track of Employee Overtime Hours

Employers must carefully document and calculate overtime hours in order to prevent disagreements or legal difficulties. Overtime hours are usually paid at a higher rate.

Speaking of effective overtime management techniques, companies may spot any problems with workforce numbers or job allocation by keeping an eye on employee hours. If some employees are working extra hours regularly, it means more staff is needed or the job allocation has to be changed to avoid burnout and ensure productivity. One tool to manage overtime at work is employee scheduling software.

One tool to manage overtime at work is Overtime Tracking Software. Features like scheduling, time tracking, and reporting are usually included in this kind of software, which can help businesses manage their employees and prevent overtime issues. It also works well when paired with Attendance Tracking Software to ensure records are accurate and employees are paid fairly.

Here are the reasons why integration is important: 

• Monitor staff hours: Regular hours, overtime, and other types of hours, including vacation or sick leave, are tracked by the software. Businesses can use this data to monitor extra hours and make sure employees aren’t staying longer.
• Automated overtime calculations: This technology enables the computation of overtime in accordance with the norms and regulations of the organization. 
• Real-time visibility: It also gives detailed information on the hours and schedules of employees. This information enables managers to take action and spot possible overtime problems before they become an issue.
• Notifications and alerts: When employees go over their allocated overtime hours or are close to their overtime limitations, the program automatically notifies them. 

5. Examine Hiring More Employees

Finally, the easiest method to prevent overtime for current employees is to hire more staff to cover the void. The burden may be divided among more workers by hiring more personnel, which will reduce the amount of strain each employee has to endure at work. In addition, normal compensation is usually lower than overtime pay. Thus, lowering its requirement can contribute to lower labor expenses.

Additionally, it becomes easier to schedule employee schedules so they don't have to deal with overtime when there is more personnel available. If more workers are available during peak hours, for instance, fewer workers will need to put in extra time. Having more employees on hand can also assist in covering unforeseen absences, like vacation or sick days. 

Conclusion

Any company that respects employee productivity, well-being, and adherence to labor rules must manage overtime in the workplace. 

Organizations may reduce the risks associated with overtime while maintaining employee happiness and maximum productivity by putting proactive measures in place, such as explicit overtime regulations, employee hour tracking, and providing alternatives to overtime. 

Additionally, implementing overtime tracking software such as MaxelTracker helps simplify, automate, and eliminate errors in the management of staff shifts and overtime.