Is Overtime Killing Your Profits?


Most companies are acutely aware of the financial costs of employee overtime. Paying a minimum of time-and-a-half to have workers on-site adds up fast, but this isn’t the only aspect of these extra hours that is affecting your bottom line.

Overtime has numerous drawbacks that can significantly harm your profitability, and they aren’t all easy to spot. Here are just a few of the other ways overtime is costing you.

Falling Productivity

When used sparingly, overtime can actually bump your productivity levels up, helping you meet tight deadlines and maintain production standards in extreme circumstances. But, if having employees work overtime becomes common practice, productivity can actually stagnate, or even fall.

Once overtime becomes commonplace, some employees compensate for the extra hours by lowering their peak production levels. This can be a method for taking advantage of the additional pay or for helping them save energy, making the extended work hours feel more manageable.

If mandatory overtime ends up being the new standard, you’ll also see employees burn out. After some time passes, it becomes challenging to keep up with the extra demands and your staff may become resentful or frustrated with the additional pressure, leading them to not perform at their best. And, if there is no end in sight, some of your top talents may even look for new employment opportunities, giving them a chance to escape the longer hours and mitigate their rising stress levels. This ultimately leaves you shorthanded and can worsen the cycle of overtime for the rest of your employees.

Health Implications

There are numerous studies that suggest that prolonged stress has negative consequences for a person’s health including damage to the immune system. This can cause workers to become ill more easily, increasing the number of missed work days. And, in extreme cases, you may even see the average duration of their absences rise, as it takes longer for them to recover when they do become sick.

Employee illnesses don’t just affect the amount of total output; it can increase healthcare costs too. This means you lose money based on lost productivity while having to spend more to compensate for rising insurance costs.

More Workplace Safety Incidents

As employees put in more hours on the job, their level of awareness often decreases, and they may struggle to maintain their regular level of focus. These shifts can increase the odds that a mistake will occur and can cause the number of on-the-job injuries to rise. And, should a serious injury take place, you aren’t just faced with costly workers’ compensation claims but will also see production decrease, both of which reduce your profitability.

While the infrequent use of overtime may be necessary, making an effort to keep it a rarity helps you save money in the long run. If you anticipate that overtime will be required over the long-term, then bolstering your workforce with temporary employees may be the ideal solution, ensuring you can maintain your production targets will minimizing cost.

If you are interested in acquiring some short-term staff, the team at The Advance Group can connect you with skilled workers who are interested in temporary assignments. Contact us today to see how our flexible services can help you avoid many of the costs associated with employee overtime.






Looking for hard-to-find talent? Need a great temporary employee? We’ll help you find the people you want faster.

Job Seekers

Staffing Company works with dozens of local employers, and we can shorten your search for a great job.