Why Your 12-hour Schedule is More Attractive than You Think

If you are a Human Resources Manager, then you are well aware of the difficulty in finding quality employees in today’s tight labor market.  You and everyone else in your local area are competing for an ever-shrinking pool of potential employees.  You have a 12-hour schedule and, at first glance, this seems to be putting off new hires before they even start.

If this is true for you, then you may find yourself asking, “Maybe an 8-hour schedule would be better for attracting employees.  Should I try that?”

The answer to this comes from recognizing your audience and the motives of those you are trying to recruit. You might be on a winning track if your offering, is based on the appreciation for your candidate’s goals and showcases the values and benefits of a 12-hour schedule in comparison to an alternative employer and schedule that your candidate may be considering.  Often you will find that your 12-hour schedules are just not “packaged” right in order to make the point that you are the better offer.

Let’s take an example.

The facility across the street is offering an 8-hour day shift with every weekend off.  They are also advertising “No overtime!”  The final nail in the coffin is that they are offering 10% more per hour than you are.

How can you compete? You could point out:

  • the great healthcare plan you have, but if your potential employees are young enough, they are on their parent’s plan.
  • the great retirement benefits but again, younger employees will see retirement as a very distant issue. They want more immediate compensation.

This may feel hopeless but in reality, you may be holding the winning hand; that is if you can get the right message out. Try this instead:

  • “Our schedule has the same annual pay as the company across the street.” You can say this because a 12-hour schedule averages 44 pay hours a week instead of 40 (like the schedule across the street).  The extra pay hours make up for the lower rate of pay.
  • “We don’t have mandatory overtime, but we do offer overtime to those that want it.”  This will appeal to those that don’t want overtime as well as those that do.  The ability to work a lot of overtime is a big attractor for at least 20% of your potential new employees.  Point out how much more money this is. “This can add as much as $XXXXX on an annual basis.”  Remember, they may have a 10% higher wage across the street but overtime pays 50% more!
  • “Our schedule has 78 more days off than the schedule across the street.”  This is a key benefit of 12-hour shifts.  Yes, the days are longer but 78 more days off is very, very attractive.
  • “We offer a 10% shift differential for those that work on the Night shift.”  If your shift differential is not this high, then consider changing it.  10% is the minimum rate it takes to attract people to non-day shifts.
  • “You can use 24 hours of vacation and get a week off.”  This will depend on the schedule pattern, however, a better vacation using fewer hours is a lesser-known benefit of 12-hour shifts.

Depending on the specific 12-hour schedule that you are using, there can be several other benefits that might help you appeal to potential new employees.

Let us help you design a shift schedule that makes you the employer of choice.  We can transform your work environment.  Our employee engagement process ensures maximum support from your workforce.

Call or text us today at (415) 858-8585 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

 

When should your shifts start?

As a Plant Manager or Human Resources Manager, in a shiftwork operation, you’ve certainly heard “Everyone that I know wants to start the shifts at such-and-such a time.”  You hear this but the question is – What do you do about it?

Should you survey the workforce and let them choose?  Do you have your own idea that possibly is soundly based on a certain business needs?  Can you have multiple shift times?  Can you try one time and then a different time and see which people like best?

This can be a complicated issue.  It can also have a profound impact on how your workforce views their workplace.  If you “impose” a start time then expect to hear a lot of “What we want doesn’t matter.”  If you leave it up to them, then be ready for them to choose something outside of your comfort zone as a manager.

I would like to make two simple points with this blog.  

The first point is, it is always a good idea to look for ways that the workforce can control their work environment.  Letting them choose something as small as a start time for their shift says, “We, as a company, believe that you know best what start time works for you.  You pick it and we’ll support it.”  This is a great message.

The second point is to make sure that you will be okay with what they choose.  This is true with start times or lunch menus or whatever you want them to pick.  

My rule of thumb on start times is that the Day shift shouldn’t start any earlier than 6:00 am.  If you think this is a good idea (read below) then you would make that a condition when you let them pick a start time.

So, what’s wrong with starting before 6:00 am?  Most 8-hour operations have the day shift start between 6:00 am and 7:00 am. The afternoon shift would start 8 hours later; the night shift, 8 hours earlier. For 12-hour shifts, employee preferences for start times tend to be about 30 minutes earlier than their preferences for 8-hour shifts. So, if you are on an 8-hour schedule that has a day shift that starts at 6:30 am, expect the workforce to want a 6:00 am start time for 12-hour shifts.

Our research has shown that employees starting at 6:00 am get about 20 minutes less sleep per night than those starting at 7:00 am. Before you run out and change your schedule, consider the following: (1) shift workers are typically locked into whatever start time you currently have. They will resist change. (2) The later the day shift starts, the later the night shift gets off. This is the trade-off. Ideally, a night shift would end early enough to allow the night shift to get home before the sun comes out. This means getting off earlier rather than later.

Call or text us today at (415) 858-8585.

Overtime: A Grab-Bag of Information

If you manage a shiftwork operation or if you are a Human Resource manager in a shiftwork operation or if you are a shift worker then – Overtime is a big deal.

Based on my 30 years of experience working with shift workers and shiftwork operations, I consider myself to be an overtime expert.  I have worked with companies around the world for more than 25 years helping them address staffing and scheduling issues, most of which have some level of overtime as a component of the overall situation.

  I thought I would try to put all of these issues into a single blog along with my own perspective.  Wish me luck…

  1. An hour of straight time (fully loaded) costs a company about the same as an hour of overtime paid at the rate of time and one-half.
  2. About 20% of people love overtime.  About 20% of people hate overtime.  About 60% of people will work their “fair share”.
  3. When it comes to overtime, the “marginal propensity to save” is always less than one (1).  What this means is that people don’t save 100% of their overtime income.  This also means that they up their standard of living when they spend overtime income (even if this means they only bought an extra candy bar).
  4. As people adjust their standard of living, they become “addicted” to the overtime.
  5. Consistent high levels of overtime extending beyond 6 months in a row will result in “Golden Handcuffs.”  This is a phenomenon where people will complain about too much overtime ruining their family lives AND complain if overtime hours are cut because they can no longer afford to make a car or house payment.
  6. Overtime at union sites is a particularly tough problem.  Senior employees get the prime overtime during the week and the junior employees end up working the undesirable weekend overtime  The result is a high turnover of new employees who tire from never having a day off.   I typically recommend that senior people get first shot at overtime up to a certain level (56-60 hours in a week) before they go to the bottom of the volunteer list.  I also typically recommend that junior employees are the first to be forced to work overtime up to a certain level (56 -60 hours in a week) before they go to the bottom of the forced list.  This recognizes seniority while keeping people from “voluntarily” working themselves to death while, at the same time, giving the junior people time off to recuperate every week.
  7. If your workload is flat (does not change by the week, or month or season) then a good target for overtime is between 5% and 15%.
  8. If your workload is highly variable, the optimal level of overtime (considering both cost and fatigue) may be much higher than 15%.
  9. Too much overtime is less of a problem than too many days of work in a row.  We short ourselves sleep on days we work.  The more days in a row we work, the farther we fall behind in our sleep.  We need days off to catch up on our sleep.  In other words, it’s better to work four 12-hour shifts in a week than to work six 8-hour shifts.  Both have 48 hours but the 12’s have 3 times as many days off for recovery.
  10. If a machine paces the work, then moderate levels of overtime will not have an impact on productivity.
  11. If people determine the pace of work, more overtime will cause the people to slow down, even if it is unintentional.
  12. Overtime at high levels will cause drops in productivity, safety, quality, and retention.
  13. When assigning overtime, do so as far in advance as possible to minimize the disruption to the plans your workforce may make outside of the work environment.
  14. If your overtime level is zero, you are not “perfectly” staffed.  You are over-staffed.
  15. The accident rate per hour should be expected to go up between the 12th and the 14th hour worked in a day.
  16. Overtime does not make people sleepy.  Lack of sleep makes people sleepy.  Circadian rhythms also play a role in alertness.
  17. Overtime allows a company to compete for labor with other companies that may pay higher hourly rates but offer very low overtime amounts.
  18. When people work outside of their normal schedule, pay them a premium.  They are helping you on time that was originally considered to be their own.
  19. Straight time is typically purchased in 40 hour/week increments when you hire someone.
  20. Overtime hours can be purchased in any quantity you wish.  Even though it costs the same as straight time, you are actually getting a fully qualified person as opposed to hiring and training someone to provide more hours.
  21. All employees want overtime when they want it and they don’t want it when they don’t want it.  Go figure.

I welcome your questions and feedback.  If you disagree with me, first ask yourself, “Is my perspective different from the one Jim was using when he wrote these?”  I say this because I can easily find unique situations where each of the above is not true.
 

Call Us and We Can Help

Call or text us today at (415) 858-8585 to discuss your operations and how we can help turn overtime into an asset that your workforce appreciates. You can also complete our contact form and we will call you.

Workforce Scheduling for Food Manufacturing

Managers of Food Manufacturing operations, you have some very unique challenges that are often not a concern in other types of manufacturing operations.  These are typically issues surrounding seasonality, sanitation, and product mix.  At Shiftwork Solutions, we know how to help you design a shiftwork structure that maximizes your production capacity in spite of these complications.

Over the last 30 years, Shiftwork Solutions has worked with dozens of food manufacturing facilities.  One thing that always strikes us is how complicated their production requirements are.

While a typical manufacturing facility will say “Our overtime is too high” or “We need to increase capacity”, a food manufacturer will use these statements as only a beginning.

In this post, I’m going to cover some of the “Low Hanging Fruit”; those things that we go after when optimizing a food manufacturing plant.

Product Demand: Most food manufacturing facilities experience some degree of variability in their demand.  For example, soft drink demand drops off in the winter while potato chip demand goes up as the Super Bowl approaches.  The questions to answer are: (1) How big is the swing? (2) How predictable is the swing? (3) What are your labor options (Full Time v. Temps v. Overtime)? (4) What is the cost of training v. retaining?  Are you willing to lose skills during a slow time?  If not, what is the cost of keeping them around so they are there when you need them? (5) Can shelf life be used in such a way as to allow leveling out of production? (6) If you have multiple plants, can you keep some higher performers at capacity and allow the poorer performers to handle the variability?

Product Mix: If all lines make the same thing all the time, this is not an issue.  However, this is almost never the case. The questions to answer are: (1) Does line X always take the same amount of people to run when it is running?  If not, what is the variability? (2) Can multiple lines produce the same products or is each line the only line that can make certain products? (3) What is the cost of training your workforce to be able to operate multiple lines?

Sanitation: This is something 100% of food manufacturers must deal with.  A typical solution is “We shut down at night or on the weekend to clean”.  This isn’t a bad idea except for 3 things: (1) Every time you shut down, you must startup.  Start-ups are the least productive times for your lines.  (2) Every time you shut down, you must clean.  Cleaning = labor dollars.  Shut down fewer times you will clean fewer times.  (3) While you are cleaning, you are not producing.  Why shut down for 8 hours (and lose 8 hours of productivity) when you really only need 4 hours?  Scheduling sanitation to occur when you need it and only in the quantities you require will increase equipment availability and decrease labor costs.  Cross-training operators to perform sanitation duties can often be the best solution.

Maintenance: When companies contact us, they are usually capacity constrained.  This means maintenance has been pushed to the very edge of the week – Saturdays and Sundays.  This can result in poor accomplishment rates as mechanics rush to fix everything in a very tight window.  Spreading operations across more days will allow maintenance to be spread out as well.  For example, if you go to a 24/7 production schedule, it does not matter when you take a line down, so take it down when you are able to do your best work.

Other areas that need to be considered are R&D, Quality, Supervision, Distribution, and Planning.  Leave out any of these puzzle pieces and you will not get the complete result you are after.

Let us help you develop a better way to schedule your sanitation.  Use our process of analysis and employee engagement to transform your workplace.

Call or text us today at (415) 858-8585 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

Our Clients Are Talking

Every now and then, we like to make sure that organizations not only recognize our knowledge about shift work and the change management process around it but they feel assured that we bring that high level of expertise to the table with every company we work with.

We’d like to share some quotes from past clients and take this opportunity to thank them for their kind words.

“Hiring Shiftwork Solutions was some of the best dollars we have spent. We hired them to help us go to continuous operations with buy-in from the workforce. Dan Capshaw’s exemplary operations analysis and work with our people showed how tightening our policies would be supported by the workforce and allow us to gain the additional capacity that we needed without changing schedules at this time. If you are looking for someone with sincerity and sensitivity in dealing with the whole workforce, then Dan Capshaw and Shiftwork Solutions are the ones you want to call.”  Rick Rinard, Plant Manager, Dana Corporation

“Kellogg Company has used Shiftwork Solutions to implement alternative work schedules at several manufacturing locations across the US. We are extremely satisfied with the results. Shiftwork Solutions has developed a well-defined, easy-to-understand process to engage both our management teams and our hourly employees in the evaluation of various schedules and most importantly, ownership in deciding which schedule is best for them and how to best transition to those schedules. Morale has increased significantly at each of our facilities in which Shiftwork Solutions has assisted us in transitioning to alternative work schedules.”  Mark Paschal, Senior Director, HR Practices, Kellogg Company

“Shiftwork Solutions helped us to successfully expand from 5 days a week to 7 days a week. Their expertise was instrumental in achieving employee support for this change.” Kathy Amrhein, Human Resources Manager, Pharmacia

“A shift structure change is an emotional event for an organization and Shiftwork Solutions was great in not only helping us manage that change but in helping the organization decide what change should be made.” Mike Vanhoy, Vice President of Operations, Infineon Technologies

Jim Dillingham of Shiftwork Solutions is right up there with the best among consultants and business leaders. He learned our business very quickly by studying data and briefly meeting with key people from all levels. By working with and quickly gaining the trust of our people, Jim eliminated the volatility, softened emotions, eased fears, and helped our people select an alternate schedule that best matched their lifestyles. His disarming nature, thorough knowledge of the intricacies of work schedules and how they affect associates and their families, and superb communication skills led to a very successful implementation of an alternate schedule that significantly reduced overtime and turnover. Jim’s help in writing policies and procedures not only for ongoing, day-to-day operations but also for the implementation saved us time and anguish. I knew very little would have to be tweaked as we worked with our new rules for vacation scheduling, holiday pay, overtime, pay periods, and attendance. He delivered the best results per consulting dollar I have ever seen. On top of all this, he is fun to work with. Even though we are well over a year into our new schedule, our people still ask me if I ever hear from Jim Dillingham.” John Bartman, SPHR, Vice President, Human Resources, Snyder’s of Hanover

“…As a union organization, we are acutely familiar with some of the problems associated with shift work. Trying to balance a company’s needs with the needs of its members is not an easy task. “Our members at Electric Boat Corporation successfully changed to an alternative shift schedule to meet operational demands. Dan Capshaw from Shiftwork Solutions was instrumental in helping the company find fair alternatives that met our members’ needs. If you are thinking about changing schedules, I highly recommend you give Dan a call.”  Mel Olsson, President, UAW Local 571

“Surviving in the tough business world we live in today requires three major components: satisfied shareholders, satisfied customers, and satisfied employees. Shiftwork Solutions led us through a high-quality process that proved that a win-win-win is possible, practical, and profitable. Building flexibility into our operating schedules, while meeting these three major components of our business, significantly positioned our operations for a workable long-term business equation.” Rick Halpin, Plant Manager, Polymer Group Inc.

“Shiftwork Solutions helped us focus our resources on our most productive equipment — allowing us to increase our capacity by over 10% without increasing labor costs or buying new equipment. The return on our investment in their consulting services was outstanding.”  Mike Crane, Executive Vice President, Crane Plastics Company

“When it comes to helping shiftwork operations perform at the highest level possible, the consultants at Shiftwork Solutions are the best.”  Bruce Hill, Vice President of Human Resources, The American Coal Company

“…Your obvious expertise in shift scheduling, Shiftwork Solutions’ database of schedules and survey results, and the empathy, sincerity, and sensitivity that you showed in dealing with our people were exemplary. In combination, these factors produced an on-target consulting result, which was by far the most impact delivered per consulting dollar that I have seen.”  C. David Lilly, President, SiteRock Corporation

“If anyone is looking to move to a 24/7 shift operation, Shiftwork Solutions is the greatest resource you will find.  They work with your employees throughout the entire process getting their feedback and buy-in allowing you to focus on satisfying your customer needs.  They are truly awesome to work with and are there for you during all phases of the project.” Carol Jacobson, Human Resources Manager, Menasha Packaging

“Jim Dillingham and his team at Shiftwork Solutions provided great insight and were an invaluable resource allowing us to seamlessly implement the 24/7 schedule while keeping our team members actively engaged in the process.”  Bill Berg, Regional Operations Manager, Menasha Packaging

“Jim provided invaluable insight into the many aspects of selecting our 24/7 shift system for our new plant in CA. We were looking for help and guidance in what felt like a minefield of possible outcomes. His analytical approach helped us understand and quantify many possibilities. His years of hands-on implementation knowledge and experience prepared us for the key and most important part of any proposed change, it’s the rollout. We took to heart his emphasis on getting the message right, communicating effectively and educating the affected employees on the new schedule”  Lee Jared, Vice President / General Manager, Kalle Group / Jif-Pak

”Shiftwork Solutions enabled us to schedule our facility in the best way possible to meet our growing customer demand. The experience that Jim Dillingham brought to the table prevented us from making a lot of the mistakes we would have made had we sought to implement this strategy on our own. Jim was outstanding at effectively communicating the desired changes with our employee base, and collaborating with both the company and the union, in order to obtain the information and buy-in necessary to successfully implement a shiftwork schedule. Additionally, the data Jim was able to gather from his face-to-face discussions and surveys with our associates continues to help us optimize our scheduling to best suit our company and workforce needs. I would highly recommend Shiftwork Solutions to any company considering conversion to a shiftwork schedule.” Joseph J. Buchanan, Plant Manager, Carl Buddig & Company

“Jim Dillingham of Shiftwork Solutions LLC made a very significant contribution to our getting major and beneficial scheduling changes to the contract; doing so in a collaborative, non-adversarial way. I certainly appreciate his professional and team-oriented approach.” Howard Bernstein, Partner at Neal, Gerber & Eisenberg  (Howard represents employers throughout the U.S. in labor relations and employment law matters and employment-related litigation, with an emphasis on contract negotiations, arbitrations and injunction proceedings, NLRB election campaigns, unfair labor practice cases, and employment discrimination matters.)

“Shiftwork Solutions provided the expertise we needed to evaluate the pros and cons of the various shift arrangements that can be used for continuous operations. Jim Dillingham coached our entire organization from how the various shifts work, associate survey, policy changes, implementation, and follow-up. Highly recommend both Shiftwork Solutions and Jim Dillingham to get it done right the first time.” Tom Gilmore, Sr. HR Manager Nissin Brake

“Shiftwork Solutions LLC exceeded my expectations while facilitating an agreement between the union and management to implement a totally overhauled continuous operation work schedule for our 300 person facility. Given the long history of the plant, I was pleasantly surprised at how easily Jim Dillingham was able to get the job done. Jim’s experience not only helped us reach a quick agreement but additionally, we found a detailed solution that was well received by both sides after the contract.”  Bernie Anderson, President Miba Bearings US, LLC

We are proud to provide expertise organizations value and address the challenges they face due to fluctuating demand, specifics of labor supply or else. Through our services they have fully implemented new schedule patterns supported by team members, they have a managed transition — policies and processes in place,  engaged management and –  if needed – union negotiation during the change process. They gain additional capacity, save costs, time and anguish. They can reduce overtime, increase output and adjust to fluctuations in demand to ultimately arrive at satisfied customers, employees, and stakeholders.

 We appreciate the opportunity to think with them and work with them to achieve their highest potential.

Call Us and We Can Help

Call or text us today at (415) 858-8585 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

The Weekend Warrior Trap

Human Resource Managers; how would you like a schedule that your employees will love?

Plant Managers, how about a schedule that adds 40% more potential production hours onto your weekly schedule?

Now that the hook is baited….shall we take a bite?

If that particular schedule calls for you to hire a weekend crew (aka Weekend Warrior Schedule) then you will want to give this idea a pass.

Weekend Warrior refers to a type of staff scheduling strategy for covering 24/7.

At its most basic level, a Weekend Warrior schedule is one that uses two crews to cover all of the weekend work so the rest of the company’s employees don’t have to.  There are several variations to this.  Here are a few of the more basic models:

  1. Two weekend crews are used.  One crew works 12-hour days on Saturday and Sunday while the other crew works 12-hour nights on Saturday and Sunday. In this way, the Weekend Warrior crews work 24 hours a week and only work 2 days per week.  The regular weekday shifts are covered by three other crews: an 8-hour day crew, an 8-hour afternoon crew, and an 8-hour night crew.
  2. Two weekend crews are used.  One crew works 12-hour days on Friday, Saturday, and Sunday while the other crew works 12-hour nights on Friday, Saturday and Sunday. In this way, the Weekend Warrior crews work 36 hours a week and only work 3 days per week.  Mondays through Thursdays are covered by two other crews: a 12-hour day crew, and a 12-hour night crew.
  3. Two weekend crews are used.  One crew works 12-hour days on Saturday and Sunday while the other crew works 12-hour nights on Saturday and Sunday. In addition to the 12-hour weekend shifts, each crew will work 2 other shifts of 8 hours at some time during the week.  In this way, the Weekend Warrior crews will get a total of 40 hours a week.  The regular weekday shifts are covered by three other crews: an 8-hour day crew, an 8-hour afternoon crew, and an 8-hour night crew.  Note that the weekend crews will augment the regular weekday crews when they come in for their additional shifts during the week.

While there are several variations to this concept, these three represent the lion’s share of what we have seen out there.

Now that we’ve clarified the type of schedule, let’s look at The Bait & Trap.

The Bait or the thing that makes this type of schedule so attractive is that it appears to satisfy everyone involved.  The company needs 24/7 coverage and this provides it.  The employees don’t want to work weekends so you hire someone else to do it.  This satisfies your existing workforce.   Potential employees want a job and will often take any shift to get a foot in the door.  This schedule allows people to get that foot in there, provided they are willing to work weekends – done deal.

Here is the problem.  The weekend crew will under-perform unless the company over-pays.  The Trap is that once this becomes apparent (usually within the first 18 months after implementation) it is too late.  Changing the schedule will seem like a take-away and the workforce will fight it tooth and nail.

Let’s look at the “problem” a little more closely.  Here are the things we typically hear:

  • The weekend crew has a high turnover as the employees leave for better hours.
  • The weekend crew has high absenteeism. This job is typically their back-up job.  When they go on vacation from their “main” job, they simply call in sick for their weekend job.
  • The weekend crew is out of touch with the rest of the plant.
  • The weekend crew people move to the weekday crews as soon as there is an opening thus making sure the weekend crew is staffed with the least skilled and newest employees.
  • The weekend crew typically performs at about 60% the rate expected of weekday employees.
  • When the weekend crew comes in for their 8-hour weekday shifts, the plant becomes overstaffed.
  • The weekend crew typically gets a full benefits package.  This means a 50% burden rate on the weekday employees equates to a 60-85% burden rate on the weekend crew’s hours.
  • Some companies, in an attempt to improve retention and performance on the weekend crews, will up the ante.  For example, they may pay forty hours for 24 hours of work.  I have seen companies that do this end up paying about twice as much for each hour worked by a weekend crew as they do for a weekday crew.

It looks good so companies go to it.  It doesn’t work as planned and companies can’t get rid of it.  If that’s not a trap, I don’t know what is.

If you know of anyone that is thinking about implementing a Weekend Warrior Schedule, I recommend that you have them take a look at this posting first.

Let us help you find a customized shiftwork solution that best fits the production needs of your site. 

Use our process of employee engagement to ensure the workforce buys into your new schedule.

Call or text us today at (415) 858-8585 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

5 Things You Should Know About Overtime

  1. Quantity Matters.  If your workforce is complaining about overtime, don’t assume that it’s always because there is too much.  It may be just the opposite.  In most workforces, about 20% of your workforce will avoid all overtime.  At the same time, about 20% of your workforce will work all the overtime they can get.  The remaining 60% will tolerate what they consider “their fair share.”  Find out how much overtime your workforce wants and try to make it available to them, within reason.  Too much overtime and you run into fatigue-related issues, even if your workforce wants it.  Too little overtime and you lose flexibility to respond to short term labor needs.
  2. Distribution Matters. Suppose you knew, on average, your workforce wants 8 hours of overtime a week.  If you gave everyone 8 hours of overtime a week in response to this knowledge, you will likely find that you made very few people happy.  Why?  Because not everyone wants the same amount of overtime.  You may have a workforce where half want 16 hours of overtime a week and half want none.  So, giving 8 hours to everyone meets the needs of no one.  The key is to have a process that gets overtime to those that want it without forcing it on those that do.  While it’s probably impossible to hit this mark all the time, efforts to do so will be noticed and positively received.
  3. Cost Does Not Matter. While employees make 50% more money when working overtime, the company actually does not incur an increased cost when they pay this 50%.  The reason for this is that straight time and overtime are not “loaded” the same way.  When looking at the cost of paying for a straight time hour, one must not only consider the wage, but the additional costs such as medical coverage, payroll taxes, holiday and vacations.  Of these extra costs, only payroll taxes apply to overtime.  The result is that overtime and straight time probably cost the same (plus or minus 5%).  Companies may worry about their overtime costs and try to lower these by hiring more people.  They can then see overtime costs drop, but this should be accompanied by a nearly identical increase in straight time costs.
  4. Lead Time Matters.  Resistance to overtime is inversely proportional to how far in advance the overtime is announced and assigned.  If the lead time is short, resistance is high.  If the lead time is several days or weeks in advance, resistance is low.  Actively look for ways to extend the amount of time between the assignment of overtime and when the overtime will actually occur.
  5. The Schedule Does Not Matter.  Overtime quantities depend on two things: (1) How much work there is and (2) How many people you have to do that work.  Low staffing equals high overtime and high staffing equals low overtime.  The schedule only determines “Where” the overtime will occur.  Does it occur before or after a shift?  Does it occur on a weekend?  Does it occur on a day off?  These are the things a schedule determines.

Call or text us today at (415) 858-8585.