High overtime level is expensive. What you can do to curtail your overtime hours.

by Gabriele Kaier, 17.10.2016

Overtime hours means high costs and research has shown the negative effect of working overtime on employee health and productivity. Below you can find five negative effects of working high levels of overtime and we reveal how you can solve them.

Overtime hours means high costs and research has shown the negative effect of working overtime on employee health and productivity. The new overtime rules are taking effect on December 1: About 4.2 million employees who are now not eligible for overtime pay will get the eligible salary threshold for overtime pay. From now on, it is more important for you as an employer to determine how many of your employees are working overtime and why. Below you can find five negative effects of working high levels of overtime and we reveal how you can solve them.

1. Increased health problems

Several studies have reported an association between long working hours and increase in lower-back injury, higher blood pressure, mental health problems, overweight, tobacco and alcohol consumption. A study by Cornell University shows that round about 10% of employees who work 50 to 60 hours per week suffer from work-family conflicts. This rate jumps to 30% for those who work more than 60 hours. The divorce rate increases as weekly hours increase. These factors give rise to mental health and alcohol problems. A Canadian study showed that workers who increased their work hours from 40 hours or less per week to over 40 hours per week experienced an increase in tobacco and alcohol consumption, an unhealthy weight increase among men, and an increase in depression among women. On the other side, indirect costs such as health care costs, and absenteeism are rising, while productivity decreases.

2. Increased safety risk

Several studies show that long working hours can be linked to increased safety risk and working errors as or workers’ accumulated fatigue . After 16 hours at work, accident rates tripple. Companies with shift work operations and with more fatigue-related problems have also higher rates of overtime. Longer working hours have also effect on sleep quantity and quality.

3. Less productivity

Studies showed that productivity decreased by working overtime hours. White-collar employees who work 60 or more hours in a week have 25% lower performance than expected. Hence, fatigue slows down work rates and productivity decreases. Employees suffer from work-family imbalance and health problems.They are physically at work, but they lack of concentration.

4. Increased absenteeism

Poor health, fatigue or people simply needing time off can lead to absenteeism. If employees are absent they have to be replaced by other employees who work often overtime themselves, which makes the problem self-perpetuating. Morale is also reflected in absenteeism: Shift operating companies with very high overtime levels have at the same time very poor morale.

5. Worse turnover rates

On one side, decreased turnover is a consequence of excessive absenteeism. On the other side, absenteeism causes high overtime as the work of absent employees has to be filled up if demand is to be met.

How to fix it:

Long hours spent at work have an effect on employee productivity and morale. They can cause unscheduled absences which rise direct and indirect costs. However, it can also be an opportunity to improve your policies and processes. With the new rules coming into effect in December, you can start preparing for the changes by assessing why your employees are working overtime and figuring out what you can do to help them. TimeTac has various tools to track employee hours and can help you and your team navigate the right processes and systems to suit your business. Interested in learning more? Contact us for more information.