Time is a valuable asset in construction and manufacturing operations, where every minute of work moves the needle toward project completion. When deadlines loom, skilled labor often works overtime in an effort to take projects to the finish line.
However, this all-too-common practice has serious consequences — leading to employee burnout, reduced productivity, absenteeism, higher costs, and other problems. To preserve your workforce, it’s essential to curtail overtime.
With an overtime reduction action plan, you can create a healthier work environment and optimize your efficiency even during busy periods when projects intensify. Read on for overtime reduction strategies you can implement in your organization.
Negative Effects of Excessive Overtime
The Fair Labor Standards Act dictates that non-exempt employees must receive overtime pay for any hours worked beyond 40 in a workweek, at a rate of at least one-and-a-half times the employee’s regular pay rate. Under new rules, which are currently delayed, anyone who makes less than $35,568 would qualify for overtime pay.
Earning time-and-a-half might initially sound like a good deal for anyone looking to make extra money. When overtime becomes a regular occurrence, however, the effects can be detrimental — compromising efficiency, safety, and job satisfaction. Below are some of the negative consequences of staying on the clock longer.
Increased Health Problems
Prolonged periods of overtime may contribute to a range of health issues, from cardiovascular problems to heightened stress levels. According to research published in the International Journal of Environmental Research and Public Health, long working hours increase the risk of cardiovascular diseases, chronic fatigue, stress, depression, anxiety, sleep issues, mortality, alcohol use, smoking, hypertension, and other health problems.
When workers’ sleep diminishes, they can experience mental health issues, compromised circadian rhythms, and declined cognitive function. In the long term, a lack of sleep can lead to cardiovascular diseases, obesity, and diabetes.
Increased Absenteeism
The combination of overexertion, inadequate rest, and health issues often triggers absenteeism. When workers take extra sick days, it strains the existing workforce, zaps productivity, and drives up costs.
In the construction industry alone, the annual cost of lost productivity due to absenteeism is $1.3 billion; in manufacturing, the costs skyrocket to $2.8 billion.
Rising Turnover Rates
Work-life balance erodes with excessive overtime work. Extended hours encroach on personal time, leaving employees with minimal opportunities to recharge their batteries and enjoy their family and leisure time.
This imbalance compromises job satisfaction, leading to higher turnover rates as employees seek workplaces that allow them to prioritize their well-being.
Increased Safety Risks
The construction and manufacturing industries are inherently dangerous, demanding high levels of alertness and precision — which don’t come easily to fatigued workers. Accidents, injuries, and fatalities can occur when people work longer hours than their bodies and minds will allow.
One study found that working overtime hours correlated with a 61% higher injury hazard rate versus jobs without overtime. The injury rate increased in relation to the number of extra hours worked per day or per week — for instance, working at least 12 hours per day equated to a 37% higher hazard rate.
Decreased Productivity
When employees work overtime hours, it might boost productivity and project progress in the short term. However, the long-term effects of overtime policy tell a different story for skilled labor. Fatigue and burnout compromise the quality of work, leading to errors, rework, and delays.
As long-term productivity takes a hit, the perceived gains of overtime work give way to compromised project timelines and reputational damage. In addition, you’re still left paying overtime hours without a productive work environment.
Reduce Costs With Overtime Reduction Strategies
Half of overtime work stems from a lack of labor planning, failure to meet performance expectations, and lack of visibility into progress. And while overtime can be useful for workers and employers in certain situations, excessive overtime work is avoidable.
Moreover, with the proper overtime reduction strategies, organizations can more strategically use and reduce overtime, and prevent its detrimental effects. Here’s what you need to know about reducing unnecessary overtime.
Overtime Reduction Action Plan Defined
An action plan is a road map for addressing overtime challenges and devising ways to reduce overtime. It defines objectives aimed at improving workforce efficiency, curbing excess work hours, and promoting a healthy work-life balance. It also benefits the organization by reducing absenteeism, improving productivity, and boosting retention of skilled labor.
How to Design an Action Plan
Follow the steps below to design an action plan that aligns with your organizational goals.
Holistic Overview of Past Performance
Understanding your organization’s historical performance will help you plan for the future. By analyzing past projects, employee overtime patterns, and factors that have led to excess work hours, you can estimate costs and predict how much you need to invest in skilled labor.
Effective Labor Partner
Collaborating with a high-quality staffing agency such as Tradesmen International® can ensure a consistent supply of superior workers. As the agency augments your workforce, you can reduce the need for overtime while keeping up with all phases of your projects.
Overtime Reduction Strategies: Action Plan Considerations
An overtime reduction action plan consists of various strategies, any of which can be effective in reducing employee overtime hours. Combine the strategies below to create a robust plan that meets your objectives and supports your workforce.
Allow Flexible Work Schedules
Poor work life balance can have a serious effect on employees. Build flexibility into your work schedules to allow employees to adapt their working hours to match their peak productivity times. Flex time, compressed workweeks, time off to tend to personal matters, and work-from-home arrangements are just a few ways to foster flexibility in employee schedules.
Create Space for Cross-Training Permanent Employees
Cross-training your permanent employees across multiple roles can reduce employee overtime and help create a buffer against labor shortages caused by unexpected absences or skill gaps. Invest in training programs that equip your workforce with versatile skills, making it adaptable, reducing overall labor costs, and limiting your reliance on overtime.
Allocate Proper Resources Before a Project Starts
At a project’s outset, ensure you have adequate staff to meet the project’s demands. Estimate the number of workers, the equipment and materials, and the time you’ll need to complete the project. Doing so will help you plan appropriately and avoid surprises along the way.
Automate Whenever Possible
Automation is everywhere, reducing the need for human involvement and improving workflows in all industries. Automated scheduling software, planning, safety management, and other processes can optimize your resources without the need for overtime hours.
Establish Innovative Processes
Foster a culture of continuous improvement. Encourage employees to identify bottlenecks and propose alternative solutions. Continuously review, test, and implement innovative ideas that can improve your operations and minimize overtime costs.
Overtime Reduction Solutions With Tradesmen International®
An overtime reduction action plan takes time to implement, but the end result is worth the extra effort. In time, you’ll see the results in a healthier, more efficient workforce — and a healthier bottom line.
As your overtime reduction action plan takes shape and your skilled labor demands fluctuate, it’s beneficial to have a trusted partner at your side. At Tradesmen International®, we specialize in providing skilled labor solutions for the construction and manufacturing industries.
With more than 175 construction-specific recruiters and nearly 200 local market service teams, we’re well-equipped to identify the top craftworkers for your needs. Our expertise lies in offering a diverse pool of talented, rigorously vetted craftspeople who offer the same high-quality work you expect from your permanent workforce.To learn more and get started, complete our simple online form with details about your business and labor needs. You may also request a free labor productivity consultation to explore our tailored staffing solutions.