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The Problem of Unwanted Overtime

Kendrah Wick
2/15/18 11:28 AM

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Many companies have a line item to track the cost of overtime. This, of course, makes it natural to keep an eye on the amount of overtime taken. But without a full understanding of the best use of overtime, or without a way to track trends in how it’s being used, managers may worry about having any dollars at all allocated to it. They just want to play it safe. The bad news is that this can lead to continuous, unnecessary, and unplanned over-staffing and unprofitable inventory spikes.

The fact is, overtime can often make sense for a large company. Overtime makes good sense when you strategically plan for it to meet unexpected short-term changes in production needs or to manage seasonal or other peaks in demand. The effective use of overtime can create large amounts of flexibility and improved employee engagement.

It’s the unplanned overtime that hurts

Paying for more overtime than you had anticipated can be the result of several causes, each with different roots in an organization. Three common reasons are being chronically short-staffed, continually mismanaging absences, and having a company culture that encourages overtime. Regardless, the results are the same — more unplanned overtime and higher business costs.

Tomorrow, ONEMINT will be releasing an infographic on common Time & Labor Management issues and how those issues can be rectified by implementing a Human Capital Management system. Check back tomorrow to learn more about how automation can help reduce unwanted and unnecessary overtime and save you money.

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