tired employee overtimeCompanies across the country have been trying “to do more with less” for years now, but by attempting to “run lean”  many now find themselves severely understaffed.

Understaffing does not create value.  It creates holes… that have to be filled by exhausted, demoralized, multi-tasking employees.

In the long run, not maintaining adequate staffing levels will always cost you more.

This idea does seem counter-intuitive.  Overtime is extremely popular with employees, and most will readily agree to take on more hours.   Who does not want the extra income….for vacation, the newest smartphone or to simply pay bills?

However, the true costs of overtime quickly rear their ugly heads and begin to manifest themselves in a vicious cycle that includes:

  1. increased risk for accidents and injuries due to greater chronic fatigue, stress and chronic disease which (in turn)
  2. increases the number of sick days, tardiness, and absenteeism which (in turn)
  3. creates a perceived need for more overtime…

The cycle continues.

Depending too much on overtime will have serious monetary consequences as well, including:   

  • Lower productivity. Overtime will boost productivity at first, but – after 8 weeks – productivity rates will begin to drop to the point that all previous gains will be erased.
  • Higher healthcare costs. This is due to higher stress levels, and the cost of stress is real. The costs are real.  Seven out of ten employees who suffer from workplace stress get sick.  This increases absenteeism and turnover, increases health insurance costs, and increased compensation claims.
  • Higher turnover (and related costs).  After a short period of time, any additional income earned through overtime will lose its appeal.  Your employees will begin to look for other opportunities with better work/life balance.
  • Reduced growth. Lowered productivity impacts production speed and service levels. It impacts your employees’ ability to meet deadlines, manage existing workloads, and interact effectively with customers. If they cannot keep up with the current workload, there is no possible way to explore new business opportunities.
  • Reduced quality. When employees are stressed, attention to detail takes a backseat.  Mistakes happen, and mistakes will cost you money.
  • Decreased industry reputation. Delivery and quality issues – as well as poor customer service – leads to lower customer satisfaction.   Unsatisfied customers do not become repeat customers, and that will cost you money. Remember, it is always cheaper to keep current customers than to acquire new ones.

So embrace a contingent workforce strategy to help you reduce the true cost of overtime.   Look for a staffing partner, like Snelling, that has a stellar reputation, understands your local market, and has the employees you need – when you need them.  When you are ready to begin, visit the Snelling website and find your local office today!

 

This article has 1 comment

  1. Geronimo Maldonado Reply

    Great article I hope Wallmart can understand and learn this point and stop the explotation.

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