The Hidden Costs of Overtime

Most employers can figure out the monetary costs associated with overtime. When you’re paying your employees, in most instances, time and a half, it doesn’t take long to add up. Staying late and getting the work done may offer short term benefits, but take a look at the long-term effects of continuous overtime. You will see the negative impact it has on employee productivity, health and safety.

Effect on Productivity

While it may seem that productivity would rise as a result of overtime due to the increase in wages, in the long run it will have the opposite effect. If overtime becomes a consistent part of operations, some workers may lower their peak productivity until overtime hours take effect. So even though the work gets done, a company may end up paying more in overtime simply because it has become expected.

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On the opposite end of that, you could run into issues where someone is working too much for an extended period of time and eventually burns out. At a certain point, it may be wiser to bring in a new employee, even if it’s only temporary, instead of having current employees potentially taking advantage of the system or suffering from burnout.

Effect on Health

For most employees, their stress levels at work are directly related with the length and difficulty of the work. When stress levels are high, the immune system is weakened, leading to a higher likelihood of illness. As a result of these illnesses, employees will miss work more often or at the very least show lower productivity levels. But this issue is larger than any single employee, with costs related to healthcare benefits rising for the entire business.

Effect on Safety

As each hour goes by, an employee becomes less attentive and more prone to making mistakes that can lead to serious injury. As an employer, it is crucial to weigh the risk of working overtime with the possibility of an injury that could lead to a worker’s compensation claim and loss of an employee for an extended period of time.

While occasional overtime may be necessary to finish a project, it is something that companies should use sparingly for the reasons mentioned above. Employers that risk the health and safety of their workers will have consistently lower levels of productivity and will have a tough time staying in business due to high turnover and competition.

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Robert Hoeft

Robert Hoeft
Robert Hoeft is a marketing assistant at QPS Employment Group.

Robert Hoeft

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