How can working overtime become a valuable strategic measure
Managing overtime in fluctuating markets can be an important source of competitive advantage if done strategically and with productivity in mind. But it can be tricky to overcome some preconceptions.
Working overtime is still frowned upon
Managers don’t like resorting to overtime work, which is understandable as it can have many negative aspects:
- Lower productivity
- Legislative challenges
- Higher costs
- Possible health issues
However, the most common alternatives in fluctuating markets can be even more costly and not necessarily needed. In order to avoid overtime hours, some managers do the following:
- hire someone full-time to meet demand, which raises the company’s fixed costs,
- order too much stock, which turns into additional costs,
- run out-of-stock, which leads to missed opportunities.
Deciding what path to take should be based on the reason why are your employees working overtime and how often are they doing it. Can it be avoided or is it a strategic measure?
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There are five reasons why most people end up working overtime.
Too much work
If a lot of employees end up working overtime on a regular basis, their manager should re-evaluate their workload. Overtime hours should never be the norm. But if the increased workload only happens in short periods or sprints, working overtime can be a strategic measure.
Shall we work overtime because we have too many meetings during the day? Almost never. Set a clear meeting agenda, invite only people who are absolutely vital and avoid this cause.
Open offices mean more collaboration but also more distractions. Some people can struggle to regain their focus. If you notice a pattern, try to move their station to a quiet corner or a closed office.
Too many notifications and emails mean people get less real work done. Encourage your employees to check emails less frequently and to schedule uninterrupted time blocks for deep work.
Shall we work overtime to prove ourselves? Not in a healthy work environment. If you notice someone doing it, compliment their hard work, but remind them that quality is what counts and that you don’t want them to burn out
As you can see most causes of working overtime can and should be avoided. However, a limited amount of hours can be strategically scheduled in order to stay flexible and satisfy real-time market demand.
A system like Dynamic Scheduling can help you find the causes of overtime hours and makes strategic overtime planning much easier.
What is the “overtime lie”?
It’s a concept that sees overtime work as too expensive and wants to keep it under 5 % at all costs.
Why is it a lie?
Because the answer to Shall we work overtime? is not simply No. Effective management of overtime work comes with some big advantages - flexible working capacities when needed, low inventory and short delivery times, resulting in consumer’s satisfaction. It can be a competitive advantage if managed properly.
We are sure you’re already tracking overtime hours in your company. You probably know which department works the most overtime and which the least.
Schedule according to you needs and stay compliant
But do you know the causes of overtime? We mentioned 5 possible reasons earlier. There are 3 more that can stand between you and an optimal schedule:
- Continous workforce shortage
- Subpar absence management
- A business culture that promotes unnecessary overtime work
If the above categories aren’t problematic, ask yourself the following five questions:
- Do the same people and departments keep working overtime?
- Are certain employees or departments often absent without giving a specific reason?
- Is there any concern among departments and employees about overtime work in regard to the company or some employees?
- Do you have too many vacancies?
- Is there a possibility of errors when tracking working hours?
As you can see, unnecessary overtime work can be a result of many variables. The best methods to reduce it are the following:
- Significantly faster or automated planning and notification system. Adapt working hours to real-time needs and notify employees so they can respond to changes and not use overtime unnecessarily.
- Transparent real-time scheduling is essential as it enables efficient planning of work-related commitments. “Real-time” is crucial here.
- It’s not enough to create effective schedules, you also need to know how to measure the effectiveness of overtime work. You can use Bradford factor to help you with that.
The most effective way to implement the above measures is to digitize and automate the key parameters for effective time management.
Automation reduces unnecessary overtime and significantly shortens the amount of time you spend managing overtime. It takes into account the availability of employees, their knowledge, certificates and legislation.
With an automated time management system like Dynamic Scheduling, you can quickly and accurately match employee schedules and fluctuating market demand. Such a system can answer the complicated question Shall we work overtime? in a matter of seconds.