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ResourceMFG | Manufacturing Workforce Specialists
Should you call time on overtime?

A joint study by KPMG and The Manufacturing Institute shows just how expensive American manufacturing can be. Compared to its overseas trading partners, the U.S. bears the fifth highest primary costs in the world, 16% above global averages for compensation, taxes, property and interest rates.

With so much slicing at your bottom line, you might be looking to increase productivity with the people and resources you already have. One solution is overtime. But, while it can be great for the workers who really want it, you'll have to pay more per hour, and there's a real risk of employee burnout and resignations. Overtime isn't for everyone or every facility. This is particularly important for a low-pressure culture that doesn't make employees feel as if they're obligated to work more than they need to.

It should be the exception, not the rule. That being said, if you manage it well, overtime can tip the scales in your business's favor. Consider the argument carefully and discuss what your employees want in the shadow of a looming recession.

For — skilled people want to do more for you

Who doesn't aim for a bigger pay packet? By all means, leave overtime as an option for anyone who can fit in the extra hours on mornings, evenings or weekends. Some workers will take it. If they perform well and consistently, you're still getting additional excellent labor at a (slightly) higher cost.

Just make sure to place individual caps on the extra shifts available per month. As business consultant Rehmann advises, "some employees may crave the additional pay and put themselves at risk. It's not unusual for 20% of manufacturing employees to perform 80% of overtime work." This can make people tired or anxious about their schedule. So, even if the very best workers want the majority of your overtime hours, spread them out as best you can, or promise more shifts during peak periods.

Against — there are other ways to maximize output

Instead of relying on overtime, you might prefer part-time staff for support. Contract them for three, six months or more if you want help with special projects. Otherwise, plan their use accordingly around the rest of your team's activities. By slipping in part-time workers' skills alongside those of your full-time team, they'll leave the greatest impact. You won't have to pay more per hour for the labor. Recruiters and contractor agencies can help you find suitable candidates who'll prove their experience.

Alternatively, try to automate as many low-skilled tasks as you can, letting employees focus on other priorities. The World Economic Forum argues that by 2030, automation will change 50% of our jobs, yet only eliminate 5%. That's an excellent case for improvements to your productivity without laying anyone off. Give robots the overtime and start upskilling human workers to make more meaningful, useful contributions to your business model.