The engineering industry is currently facing an influx of employee overtime. This brings plenty of challenges, especially to finance teams, who we are writing this article for. Adopting a powerful yet intuitive time-tracking solution can make your life significantly easier. If that got your curiosity, we advise you to continue reading.
We have all been in a situation where we would be unable to finish our workday on time. Instead, we would stay long past the clock to eventually complete whatever is required of us. Overtime is a natural occasional occurrence at any workplace. However, when it’s a repetitive pattern, it becomes a problem. Simply put, certain work hours are set for a reason and frequently going past that limit can have negative implications. What’s more, it affects everyone: the worker, the company and the end user.
Recently, especially in the engineering and manufacturing industry, there’s been a boom in employee overtime. In this article, we will explain why it is counter-productive and what risks it entails if left unaddressed. We will also propose options for how to curb it. In addition to that, we will also look deeper into the reasons for working extra. Sometimes the problem is deeper than you would assume.
Why Do Workers Choose to Work Overtime?
There are many reasons why people work overtime. The most frequent one is tight deadlines and being unable to meet them within regular work hours. However, sometimes it’s also a method used to prove one’s dedication to the higher-ups.
Although additional earnings have also always been a reason for picking up extra work, the recent economic crisis has tripled the volume of employee overtime. Unfortunately, this leads to many problems companies and individual workers need to find a way to overcome.
Challenges of Increased Overtime
There is no real issue with the concept of overtime as per se. Sometimes, depending on the situation, it’s inevitable and is therefore welcomed. However, just like all things, it’s only good in moderation. A surplus of overtime from just one worker can cause a lot of trouble. And, usually, chronic overtime is a group phenomenon.
Havoc to Pay Cycles
The key problem rising from overtime is that it can be an absolute headache for the finance team. First of all, naturally, time worked outside of business hours comes at a different rate. Then, let’s say your company offers different shifts and each of those is also rated differently. If you cover different locations, then there is potentially a travelling expense reimbursement. Based on location, the rate might again be varied. When put together in writing, this may seem unlikely to all be true at the same time, but from our experience, we can vouch that this is the case more often than not. So, let’s step away from the theory and look at a more practical example.
A morning shift worker takes a couple of overtime hours, them then bleeding into an afternoon shift. What’s more, midway through the morning shift, they have to relocate to a site with a different rate. All in all, the calculation of their wages for the day includes four different rates and a genuine effort in working out which applies where. As you can see, getting the right number for just one worker is challenging and time-consuming. Now imagine doing the same thing for 20+ of them. While these different variables are, most of the time, unavoidable, when lumped together they can seriously slow pay cycles down. Taking overtime alone out of an equation would make it a whole lot easier already. Alas, this isn’t always an option.
Increased Risks of All Sorts
You would be surprised how many issues and types of risk stem from something as simple as overtime. They apply to everyone in the company. For the legal team, badly handled or abused overtime can raise compliance and safety risks. The finances, when trying to juggle different rates and present calculations in a timely manner, are at an increased risk of error. Even the on-site workers who put themselves through overtime aren’t risk-free. In fact, theirs is the biggest as it's their health and well-being that’s at the stake. After all, in engineering works precision and attentiveness are a must due to a naturally heightened risk of injuries. Both tend to be lower when the worker is working longer than they are meant to.
As you see, a deeper dig into overtime reveals it can be more problematic than you’d assume. Of course, there’s little harm to it in moderation, but we are focusing more on scenarios when it becomes a frequent occurrence. Finally, you might be tempted to justify it by thinking that, ultimately, it drives better performance and higher productivity. Paradoxically, despite the intention of it being just that, it is often the opposite. It’s proven that constant overtime comes at the price of lower work quality. It is also barely moving productivity along due to errors that occur needing corrections, therefore setting the progress back.
Get the Situation Under Control
As you can see, overtime can spiral out of control and become the source of many problems. But don’t worry, as it does not necessarily lead to impending doom and admin chaos. If anything, you are in a position to tame and manage it. All you need are the right tools and the knowledge of how to use them.
Easy Pay Rate Calculation
Complicated pay rate changes when calculating overtime can feel crippling to your finances team and we have already explained why. The good news is that nowadays we have technology that makes this jarring task a whole lot easier. Instead of spending hours on end trying to work out the correct rates, we now have software that will do this for us within minutes. And, since there is no human involvement in the process - it comes with no human error. Unless there’s a mistake at the primary step of logging data in, of course.
Such software is not some sophisticated behemoth of innovation. All you need is a digital timesheet solution. Depending on the provider you go to, the features will vary. Therefore different tools will have a different degree of accommodating your needs for customised differentiating rate calculation. The principle, however, is more or less similar across all solutions on the market. You get to attach a certain rate to your timesheets and it is then automatically calculated based on the hours filled in. With our platform specifically, you can apply multiple rates on a single timesheet template. Alternatively, you can create an unlimited number of templates you can then use in different situations. All in all, we give you the freedom to adjust our solution to your operations and convenience.
Timesheet Rules
Even though it’s clearly stated no overtime is allowed, you might find the workers continuously adding it to their timesheets. Unless it is specifically written in their contract the additional work hours aren’t compensated, you will be needing to pay them. While this isn’t a difficult issue to address in smaller companies, it’s hard to keep track of everyone within big teams. Simply put, unless you are physically present on-site at all times and micromanage your workers, there is not much you can do to prevent them from staying longer. And when they do, you are also out of options but to compensate them for the additional time.
At Timesheet Portal, we came up with a simple yet highly effective solution - timesheet rules. To keep it short, when setting your timesheet templates up, you can program how they behave. For example, the hours put in are capped to be within a specific time frame. You can also set the maximum of hours a worker can work per week or month. If they try adding higher values, the system simply won’t let it go through. This means that whatever extra has been worked, won’t be logged and therefore not compensated. Most people get discouraged by the lack of payment for additional efforts, and therefore the abuse of overtime comes to a swift end.
Beware of Workaholism
Overtime isn’t always related solely to increasing one’s income or meeting deadlines. Constant working over hours may indicate a personal issue of an employee, known as workaholism. It’s relatively easy to tell it apart when you know the accompanying signs. However, they are not always easy to identify.
Holiday Management
Similar to its opposite, absenteeism, workaholism becomes most evident through identifying patterns. While in absenteeism you see frequent and periodic absences, workaholism is reflected in no time taken off. On top of that, the workers suffering from it are actually prevalent to work more than what’s expected from them. While this may sound like a trait of a dream employee, workaholism leads to all kinds of problems. Atop of the previously mentioned increased risks of injury and error, it also leads to burnout, negative attitude changes and potential mental health deterioration.
Naturally, you can’t be keeping a close eye on every employee and the manifestation of unusual behaviour signals the problem has been festering for a while. The way of spotting it at the early stages is by employing a holiday management system. It gives you a centralised look at your team, quickly highlighting staff with odd behaviour. If frequent overtime is accompanied by a lack of time off and you’ve noticed the employee being more stressed, hostile and overall snappier, it’s time to address it. Remember that workaholism is very much an illness. Not only this affects your worker and the results they produce, but also their surroundings and potentially their future.
Summary
The rising cost of living expenses often drives workers to try and work more hours than they should. While in itself overtime is a pretty natural occurrence, it’s not something to abuse. Not only does it raise a number of unnecessary work risks for everyone in the company, but can also bring a lot of stress to the finance department. The right software can help you keep it under control.
With the right time tracking tools, engineering companies can easily tame the surplus of employee overtime. Whether it’s by finding a way to process it quicker with automated rate calculation or by suppressing it via timesheet rules. The best solutions also come with a holiday management platform, that will help you spot unnatural employee behaviours. Be aware though, the soaring cost of living expenses aren’t the only cause of continuous overtime working. The culprit is sometime workaholism, and it should be addressed with the worker ASAP.
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