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Kate Russell

Russell HR Consulting


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The HR Headmistress asks: Overtime – is it bad for business?


From being a fact of working life, overtime has become a very emotive subject. Perhaps that’s the influence of the rise of the work-life balance lobby. Setting aside business owners, for whom 30-40 hours overtime a week is the norm, in the main there are two discrete groups of workers who regularly work overtime.

Historically, the UK has had a culture of pay for basic hours topped up by regular overtime work and payments. This is still evident in a number of industries, for example transport. Rightly or wrongly, it is part of our workplace fabric and its removal (periodically threatened by the abolition of the opt-out in the Working Time Regulations) causes gasps of horror across industry and vigorous lobbying. 

Employers in many industries rely on employees to work extra hours to cover work and their employees aim to earn a higher income.

The second group are those carving out a career. Anyone who wishes to climb the career ladder has to show willing and that means doing extra hours, usually unpaid, to showcase ambition and ability. While empathising with the views of the life-work balance lobby, I believe that there is always  an element of compromise in everything we do; you will not have a high flying career if you only want to work 35 hours a week. Poet Robert Frost put it well when he said “The difference between a job and a career is the difference between 40 and
60 hours a week.” To advance and invest in employees, companies want to see commitment from them. They won’t promote clock watchers.

The use of overtime working does offer a number of advantages, for example, greater flexibility for some work; the ability to deliver work during busy periods and to cover absences and staff shortages without having to recruit additional staff. It enables work such as maintenance and repairs to be done at a time which reduces disruption in the core business.

But let’s take a look at issues that the working of overtime raises. 
Is it good for the wellbeing of a company to rely on it? The short answer is no. It may be a commercial fact of life, but it’s not desirable.

Where employees work long hours on a regular basis they tend to become tired. Fatigue increases the incidents of mistakes, accidents and injuries and can adversely affect judgment.

And what about employee over-reliance on overtime income? For the first group of employees described, overtime is usually paid at basic or enhanced rate. The availability of paid overtime can actually discourage productivity. Unless appropriate systems are in place to measure the flow work and ensure employees are working effectively on a day-to-day basis, it’s quite likely in some cases that employees will drop their pace of work so that they can work overtime

The cost of enhanced overtime can be enormous. In April I read a newspaper report relating to the enormous costs of overtime paid in the US public sector. The Flint Journal (based in Michigan) suggested that in 2010 approximately 170 employees received a ‘pay increase’ worth at least 25 per cent simply because of the level of overtime pay. After three months in 2011, Flint City Council has already paid at least $3.7 million in overtime costs.

Another problem is that employees may come to rely upon paid overtime and treat it as part of their regular wages. Unless the overtime is guaranteed (and that doesn’t happen very often) payment will only be made if work is available and done. If employees start to expect that paid overtime is available as a right, a withdrawal can lead to resentment.

Let me close by saying that while it’s useful to use overtime from time-to-time as the need arises, it’s a case of less is more. As a general rule, try to reduce dependence on overtime. If you’re in a business where there’s a good deal of overtime worked, consider what can be done to limit the need for it. In turn, you’ll limit your risk.

Kate Russell is the MD of Russell HR Consulting and author of 101 Tips for Employers, Off the Sick List! How To Turn Absence Into Attendance  and How To Get Top Marks in…Managing Poor Work Performance.
Follow her on twitter: @KateRussellHR

One Response

  1. Working overtime

    Like the article very much. The last paragraph sums it up very well. Flexi-time can work well but needs careful management. Much overtime is the result of waste of time during normal working hours, often caused by managers who have not planned the work properly or who have failed to assemble all the resources needed.

    One of the big Dutch Insurance companies pioneered an interesting approach for dealing with the peaks and troughs of their clerical work load. They trained volunteers – mainly women – in the skills needed and  tested them,. They had a system where the ‘volunteers’  could call in asking if there was any work that day, or  wait  at the gate for the next desk to become available, rather like waiting for a space in a  busy car park. It sounds like the worst approaches of using casual labour in shipyards 150 years ago, but the conditions were good, the pay was good  and there were plenty of volunterers.  I don’t know how that would work under our present day employment laws.



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