Overtime: The Good, the Bad and the Ugly
October 12, 2009
Overtime is a topic that I could write a book about and still only hit the highlights. My intention is to, from time to time, post something about overtime. In this way, we can cover it in small, manageable chunks.
Let's make it simple to start with.
The Good: Overtime represents a set of trained labor hours that can be used in increments needed to exactly match the job at hand. Cost-wise, overtime probably costs about 10% more than a fully loaded straight time hour. However, since it tends to be more productive, the cost per hour can actually be significantly lower.
The Bad: If there is too much overtime, the workforce will complain about not having any time off. If you try to reduce overtime, they will complain about lack of income opportunities.
The Ugly: High overtime can increase fatigue, turnover, absenteeism and safety incidences.