When used strategically, overtime can be a quick way to maximize your team coverage and increase production for your firm.
When not used strategically and overtime has out stayed its welcome, it can lead to decreased productivity, quality issues, and burnout. This ultimately leads to disengaged team members and reduced job satisfaction. It’s a slippery slope and the trick is recognizing when overtime is more than just a band-aid to get you through a hump.
Here are some things you need to consider when offering overtime to your team members.
- Overtime should only be allowed with your approval. There may be certain exceptions that are always approved, like when team members are supporting you at an in-person event. Even then, there are often ways you can adjust a team member’s schedule in advance of the event so that overtime can be reduced or eliminated. Add a policy to your employee handbook and notify your team, that overtime should be discussed in advance prior to working it.
- Even when you approve overtime, you need to be very observant of your team members’ performance. Burnout is real. When overtime becomes a constant part of the workload, not only will you be paying an increased hourly wage, you may see minimal gain from those who work overtime, as their productivity will likely decrease over time. Individuals with burnout are prone to fatigue, insomnia, irritability, and other adverse health consequences including a compromised immune system.
- Look at the numbers! You need to know what your cost of hiring is, fixed costs for employees, and weigh that against the breakeven point of paying for overtime over a period of time for non-exempt employees.
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- The cost of hiring should include not only the fees for placing ads or using an agency, but also your time spent hiring and training a new person.
- Fixed costs should include any amount of money you have to pay per person you have on your team regardless of how many hours they work like: insurance, sick time, licensing costs, etc.
- Analyze your overtime, over time. Overtime rates are typically 1.5 times the regular rate of pay in excess of a set daily or weekly amount. In some cases, it could be double time depending on the hours being worked. This calculator can help you estimate your weekly cost of paying overtime vs. hiring someone at the regular hourly rate.
Remember, even if the numbers tell you that using overtime is better for your bottom line, you need to weigh the sustained impact to performance and morale. This is even more true if you’re using overtime due to a shortage in team members. If your workhorse gets sick, what will you do then?
This is when cross training becomes critically important. Managing workload is both a science and an art. The science part of it with looking at your numbers and having the skills of which methods to apply. The art part of it comes with your ability to communicate, motivate, and empower your team to identify creative solutions. Skilled managers can predict increases to workload, identify solutions to adjust (like sliding another cross trained individual over to help), as well as put measures in place to buffer for unplanned events.
Talk with your coach about this next time you’re faced with a decision to do overtime or hire.
Alicia Durante
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com -
- To Catch a Time and Production Thief - August 19, 2021
- Financially At Last! - March 18, 2021
- Has Overtime Outstayed Its Welcome? - September 17, 2020
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