Overtime can tax a company. Whether it's a necessity during the busy season or a gradual abuse of your timekeeping system, keeping overtime to a minimum is required for growing companies to excel. If unauthorized employee overtime is draining your company's resources, use these four tips to reduce that abuse.
While flagrant unauthorized overtime may be at the top of your radar, smaller time abuse is often more rampant and damaging to your business. Employees continually clocking in early or leaving late to accrue unnecessary overtime is a real problem in business and one that managers often don't feel equipped to solve. They recognize the problem but without a mandate from upper management, they may feel reporting these small abuses will be brushed off as micromanaging.
Empowering managers to deal with unauthorized overtime is essential to preventing it. All management should have a clear understanding of what constitutes unauthorized overtime and what the consequences should be to employees who continually abuse the system. Apply this across the board so it becomes a company policy rather than a managerial discretion.
The best way to gain a handle on unauthorized overtime is to truly understand how it's happening. When companies rely on old-school punch cards or manual time sheets, it can be hard to find the manpower to comb those records for abuses. Timekeeping software allows companies to understand how and where overtime is occurring through an easy-to-generate report. Management can determine whether there's a serious need for additional help in a department or if a subset of employees are padding their paychecks through unauthorized overtime. Opening up that software for employees to track their own time can help employees recognize overages and take time off later in the pay period to reduce that overtime. Tracking smarter is essential to curbing unnecessary overtime in a business.
One simple but seldom used way to reduce unauthorized overtime is to require authorization for overtime hours. It sounds simple, but many businesses don't actually require written authorization for employees to accrue overtime and that leads to employees staying late, even if there isn't enough work to justify it. Start an approval process so each manager needs to approve overtime through a written record. While businesses still need to pay employees whether overtime is authorized or not, creating a paper trail to identify employees who chronically work unauthorized overtime allows their manager to take steps to stop that behavior in the future.
Make Overtime a "Problem"
While some employees enjoy the extra money that comes with overtime, many employees see overtime as a necessary evil and one they would rather avoid. When unauthorized overtime is the result of understaffed departments and too many job duties, that overtime hurts employee morale and engagement, leading to fatigued employees and work-related mistakes.
Changing the way your business sees overtime can help both employees and the company. Rather than punishing employees for legitimate but unauthorized overtime, focus on solutions to reduce the amount of overtime needed for that department. Speak with employees who regularly work overtime to find the specific reasons those incidences are occurring. Is it inadequate staffing? Poor scheduling during shift transition? New and additional job duties? Making unauthorized overtime your "problem" can help you find creative solutions that make life for your employees easier in the long run.
Unauthorized overtime doesn't need to damage your profits this year. With a few simple tricks, businesses can minimize their overtime accruals and help employees perform their job better with more adequate staffing. Use these four approaches to get your overtime in check.