Coping with Increasing Volumes of Engineering Employee Overtime
Published: 06/02/2023
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The engineering sector is currently experiencing a surge in employee overtime, which presents numerous challenges, particularly for finance teams, for whom we are writing this article. Implementing a robust yet user-friendly time-tracking solution can greatly simplify your tasks. If that piqued your interest, we recommend you keep reading.
We've all experienced times when we couldn't finish our workday on time. Instead, we stay late to complete our tasks. Occasional overtime is natural at any workplace. However, when it becomes a regular pattern, it becomes problematic. Work hours are set for a purpose, and regularly exceeding them can have negative consequences. Moreover, it impacts everyone: the worker, the company, and the end user.
Recently, particularly in the engineering and manufacturing sectors, there has been a surge in employee overtime. In this article, we will explain why it is counter-productive and what risks it involves if left unaddressed. We will also suggest options for how to reduce it. Additionally, we will delve deeper into the reasons behind working extra. Sometimes, the problem is more complex than you might think.
There are many reasons why people work overtime. The most common one is tight deadlines and the inability to meet them within regular working hours. However, sometimes it is also a way to demonstrate one’s dedication to the higher-ups.
Although additional earnings have always been a reason for taking on extra work, the recent economic crisis has tripled the amount of employee overtime. Sadly, this creates many problems that companies and individual workers must find ways to overcome.
There is no real issue with the concept of overtime per se. Sometimes, depending on the situation, it’s unavoidable and therefore welcomed. However, like all things, it’s only beneficial in moderation. Excess overtime from just one worker can cause significant problems. Usually, chronic overtime is a group phenomenon.
The main issue with overtime is that it can be a real headache for the finance team. First of all, naturally, time worked outside of regular business hours is paid at a different rate. Then, suppose your company offers various shifts, each rated differently. If you operate in multiple locations, there may also be travel expense reimbursements. Depending on the location, the rate could vary again. While this might seem unlikely to all occur simultaneously on paper, from our experience, we can confirm that it often does. So, let’s set aside the theory and look at a more practical example.
A morning shift worker works a few overtime hours, then spills into an afternoon shift. Moreover, halfway through the morning shift, they must move to a site with a different rate. Overall, calculating their wages for the day involves four different rates and a genuine effort to determine which applies where. As you can see, getting the right figure for just one worker is challenging and time-consuming. Now imagine doing this for over 20 workers. While these variables are often unavoidable, they can significantly slow down pay cycles when combined. Removing overtime from the equation alone would make things much easier. Unfortunately, this isn’t always an option.
You might be surprised how many issues and risks arise from something as simple as overtime. These affect everyone in the company. For the legal team, poorly managed or abused overtime can increase compliance and safety risks. The finance department, when juggling different rates and preparing calculations quickly, faces a higher chance of errors. Even the on-site workers who put in extra hours are not without risk. In fact, theirs is the greatest, as their health and well-being are at stake. After all, in engineering, precision and attentiveness are essential due to the inherently higher risk of injuries. Both tend to decrease when workers put in longer hours than they should.
As you can see, a deeper examination of overtime reveals that it can be more problematic than you might assume. Of course, it poses little harm in moderation, but we focus more on situations where it becomes frequent. You might also be tempted to justify it by thinking that, ultimately, it leads to better performance and higher productivity. Paradoxically, despite this being the goal, it often has the opposite effect. It has been proven that constant overtime comes at the expense of lower work quality. Additionally, it barely advances productivity because errors occur that require corrections, which in turn sets progress back.
As you can see, overtime can spiral out of control and become the cause of many issues. But don’t worry, as it does not necessarily lead to disaster and chaos among administrators. If anything, you are in a position to tame and manage it. All you need are the right tools and knowledge on how to use them.
Complicated pay rate changes when calculating overtime can feel overwhelming for your finance team, and we have already explained why. The good news is that nowadays we have technology that makes this challenging task much easier. Instead of spending hours trying to work out the correct rates, we now have software that can do it within minutes. And, since there is no human involvement in the process - it eliminates human error. Unless, of course, there is a mistake at the initial stage of logging data.
Such software is not a complex marvel of innovation. All you need is a digital timesheet solution. Depending on the provider you choose, the features will differ. Therefore, different tools will have varying capabilities for customised and differentiating rate calculations. The core principle, however, remains quite similar across all market solutions. You assign a specific rate to your timesheets, which is then automatically calculated based on the hours entered. With our platform specifically, you can apply multiple rates on a single timesheet template. Alternatively, you can create an unlimited number of templates for use in different situations. Overall, we give you the flexibility to tailor our solution to your operations and preferences.
Even though it’s clearly stated no overtime is allowed, you might find the workers consistently adding it to their timesheets. Unless it is explicitly written in their contract, the extra work hours aren’t compensated; in that case, you will need to pay them. While this isn’t a tricky issue for smaller companies, it’s difficult to keep track of everyone in larger teams. Simply put, unless you are physically present on-site at all times and micromanage your workers, there is little you can do to prevent them from staying longer. And when they do, you are also left with no option but to compensate them for the extra time.
At Timesheet Portal, we introduced a straightforward yet highly effective solution - timesheet rules. To keep it concise, when setting up your timesheet templates, you can program their behaviour. For example, the hours logged are limited to within a specific time frame. You can also set the maximum number of hours a worker can work per week or month. If they attempt to enter higher values, the system simply won’t allow it. This means that any extra hours worked won’t be logged and, therefore, won’t be paid. Most people become discouraged when they do not receive payment for additional effort, which helps to quickly eliminate overtime abuse.
Overtime isn’t always solely about increasing one’s income or meeting deadlines. Consistently working extra hours may indicate a personal issue in an employee, known as workaholism. It’s relatively easy to distinguish it when you know the accompanying signs. However, they are not always straightforward to identify.
Similar to its opposite, absenteeism, workaholism becomes most evident through recognising patterns. While absenteeism involves frequent and periodic absences, workaholism is reflected in not taking time off. Furthermore, individuals suffering from it tend to work more than expected. Although this might appear to be a trait of an ideal employee, workaholism causes various problems. In addition to the increased risks of injury and mistakes, it can also lead to burnout, negative attitude shifts, and potential mental health decline.
Of course, you cannot keep a close eye on every employee, and the appearance of unusual behaviour signals that a problem has been developing for some time. The way to detect it early is by using a holiday management system. It provides a centralised view of your team, quickly highlighting staff exhibiting odd behaviour. If frequent overtime is linked with a lack of time off and you’ve noticed the employee becoming more stressed, hostile, and generally snappier, it’s time to step in. Remember, workaholism is very much a recognised illness. Not only does it affect the worker and the results they deliver, but also their surroundings and potentially their future.
The rising cost of living often encourages workers to try and work more hours than they should. While overtime is naturally common, it shouldn’t be abused. Not only does it add unnecessary work risks for everyone in the company, but it can also cause a lot of stress for the finance department. The right software can help you keep it under control.
With the right time tracking tools, engineering companies can easily manage employee overtime. Whether it’s by processing it faster with automated rate calculation or by reducing it through timesheet rules. The best solutions also include a holiday management platform that will help you identify unusual employee behaviours. Be aware, though, that the rising cost of living expenses isn’t the only cause of ongoing overtime work. Sometimes, the cause is workaholism, which should be addressed with the worker as soon as possible.
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