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Why Overtime is Bad for Your Business

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Time is a limited and non-renewable resource that affects the work process and is a factor that is suitable for optimization. Over the past few years, a significant number of socio-economic trends have emerged that have a major impact on working hours. The process of globalization, the development of communication technologies, and the growing need for services greatly influence the organization of working time. What is work overtime and how it affected the culture of work? Find out in the text below!

What does overtime mean?

Any time spent in performing work tasks above the agreed working hours is considered overtime work. The employee is obliged to work longer than full time at the request of the employer in the following cases:
  1. dueto act of natural force,
  2. a sudden increase in workload and
  3. in other cases when it is necessary to complete a work that is not planned within a certain period of time (hereinafter: overtime work).
From the above, it can be concluded that overtime work should be represented exceptionally, due to unforeseen circumstances, and not regularly. It is natural to conclude that an employer who has a constant need for overtime work of employees should hire an additional labor force, in order to ensure the completion of all business activities on time. Overtime is limited not only in terms of the cause but also in length. It may not exceed eight hours per week. So, if the employment contract stipulates that the worker works 40-hour a week, he cannot spend more than 48 hours at work in one week. An employee may not work more than 12 hours a day, including overtime. Since the usual working time is eight hours a day, overtime can last a maximum of 4 hours a day.

Why overtime is bad for business?

Overtime work can lead to reduced employee productivity. Working overtime brings, at first glance, higher profits to the employer. The effects of over-employment are, however, different. There is no motive that could free the human body from stress and diseases caused by overwork. Experts warn that continuous work under pressure has a bad effect on the creation of new ideas and creativity. Finally, it means reduced worker productivity for the employer. If the company often works more than working hours, it is a sign that something is “wrong” in the company. In that case, the solution is not even more work, but an analysis of why it is happening. Experts will say that good work organization will not cause the introduction of overtime work. In some cases, the company needs more employees. On the other hand, without consistent application of the law, workers are left at the “mercy and disfavor” of employers, their own interests and desires.

Burnout of employees

After 50 hours worked in one week, productivity drops sharply In companies with 40-hour working hours, only 23 percent of employees had a 9 percent absenteeism rate, but in companies that work more than 40 hours, as many as 54 percent of employees had a 9 percent absenteeism rate. People who work 11 or more hours a day have a significantly higher risk to develop depression. The risk increases as workers are paid less and have less education, and it is assumed that the main cause is exposure to long-term stress. As working hours increase, so does the risk of injury. In companies where workers often work overtime, a problem with chronic fatigue has been discovered, which increases as the number of working hours per week increases. In manufacturing, a 10 percent increase in overtime causes a 2.4 percent decrease in productivity In administrative and other office work, productivity is reduced by up to 25 percent when employees work more than 60 hours a week. Low back pain, and immediately afterward stress, are most often the consequences of overtime work. Many of the problems found are associated with stress, which in turn increases cortisol levels, interferes with sleep, appetite causes high blood pressure, impairs immunity, memory, and mood. Due to fatigue, concentration decreases, and the number of mistakes increases, which results in more frequent injuries at work, greater waste in production, consequences for service users.

Paying More for Less Productivity

Do companies have to pay overtime?

The employer should issue a written individual act on the introduction of overtime work and warn the employee of the obligation to perform it. The employee for each hour of overtime work is entitled to an increased salary in the amount determined by the general act and the employment contract for overtime work. Having in mind the cited legal provision, the employer is obliged to pay overtime work in an increased amount. Any action of the employer contrary to the above, such as, for example, refusing to pay overtime and calculating days off instead of payment, would mean a violation of the legal rights of the employee.

How much does overtime pay?

It depends on the law standard in your country and the type of work (physical, IT, etc…). In many countries, the minimum is about 30% of the salary, but mostly, it’s paid 50% of the salary.

When is working overtime not worth it financially?

The main problem with overtime work is a lack of efficiency and productivity. As more time passes, productivity and efficiency gradually fall, and that’s when overtime work is just not worth money. The study has shown that it causes the loss of millions of working days a year, which costs at least 20 billion euros. Why would you want to pay more for the work that is done badly when you can avoid overtime work? If you are wondering how, keep reading and you will find out!

No more overtime: how companies can avoid overtime

No more overtime work will help companies to save more money and avoid financial problems. Employees can say bye to all overtime challenges and  an unhealthy environment,

Flexible working hours

Flexible working hours also allow companies to produce more, consuming fewer resources. Free access to working hours and an emphasis on the result, and not only on the process and working hours but also contribute to the reduction of stress, which results in greater engagement and increased productivity. Win-win combination. The length of overtime is not necessarily a measure of success. There are also variations of the flexible working concept, so some choose to keep half of the working time fixed, and the other half to be flexible.

Time organization

Over the past few years, a significant number of socio-economic trends have emerged that have a major impact on working hours. The process of globalization, the development of communication technologies, and the growing need for services greatly influence the organization of working time. Efficiently organized and used time enables the achievement of increasingly diverse requirements and the improvement of the quality of work. By skillfully organizing time, many frustrating situations are avoided and work productivity is effectively reduced.

Tools and software

As the IT industry grows, we get more help in the form of apps. Tools can contribute to boosting the employees’ productivity, and that’s what you want, right? Here’s the list of a few types of software that may help you: Team management tools  (ASANA, Teamwork) – helps you to manage a workforce. Scheduling software (Stayhome.ai) – makes organization easier by making a perfect schedule. Time tracking software (MyHours, Spica Mobile Time) – time tracker is a must-have if you want to make sure that there won’t be timeline exceeding. Communication platform (Zoom, Skype, Discord) – helps employees to have better collaboration with other team members. Task management software (Active collab, Trello) – with these apps employees will be more organized.

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