Posted in Blog | Culture | Leadership

Overtime and Employee Productivity

When we think about managing overtime in our organizations, we typically think of it in financial terms. We consider issues like how much we are spending on overtime, how that cost compares with hiring additional staff, or the way unplanned absences impact that overtime number. While those are critical issues, there is another that needs our attention: the impact that overtime might have on employee productivity. 

Numerous studies in recent years suggest that there is a point at which overtime actually has a negative impact on both the employee and the quality of work performed. It is easy to believe that if I work 80 hours, I will be twice as productive as if I work 40 hours. However, for most people, it doesn’t work this way. We are not robots. We are susceptible to fatigue, burnout, and stress. Our bodies can break down, our mental health can deteriorate, and our productivity can dramatically decline.

This is not just true of the impact of a single week or shift, but also the accumulation of long hours over time. One study found that an employee working 60 hours a week for two months will actually produce less than the same employee working 40 hours over the same period.

To better understand this, it is helpful to examine a few areas in which too much overtime has been found to negatively impact our employees and organizations:

Health and Relational Issues   

 As you consider the impact long hours can have on an employee, the most obvious is the physical and mental health impact. Research in this area confirms that too much overtime has a negative impact on the body and mind.  Specifically, overtime is connected to back or joint pain, high blood pressure, increased stress levels, heavy alcohol consumption, unhealthy weight increase, severe work and family conflicts, a higher rate of divorce, depression, and more. 

Safety Issues

It logically follows that long work hours are connected to an increase in risk on the job. As the hours accumulate, attention and concentration are impaired. This can result in an increase in errors and accidents, which can expose employees, customers or patients to danger.  

Productivity Issues

The impact of long hours on productivity is well documented. One study suggests that when white collar workers put in 60 hours, productivity falls by as much as 25%. Another study found that there is little productivity when employees cross over the 50-hour mark. And it is not just white collar or knowledge workers who are impacted. In a manufacturing study it was found that a 10% increase in overtime leads to a 24% decrease in output per hour. 

Three factors contribute to this decrease in productivity:

  1. As the hours increase, so does mental and physical fatigue.
  2. When more time is provided to complete the work, unproductive time increases and the work rate slows.
  3. The stress and strain of the health and relational issues creep into work, leading to “presenteeism” (when we are physically present but mentally absent).

Absenteeism and Turnover Issues

The factors mentioned above contribute to this final issue: an increase in absenteeism and turnover. When overworked, most employees will reach the point where they need a break. Whether this is the result of illness, injury, or fatigue, absenteeism often leads to coverage issues. Employers scramble for replacements, which could perpetuate the cycle for other employees. 

All of this, the health issues, safety issues, productivity issues, and absenteeism issues, damage employee morale, which often leads to a higher rate of employee turnover. A study of shift workers showed that 31% of companies where employees worked more than 10 hours of overtime a week had poor morale. This compared to only 13% of those whose workers logged fewer 10 hours of overtime per week. 

High rates of overtime have been found to burn out employees, which decreases job satisfaction and increases the likelihood of turnover. In fact, companies with high overtime are likely to be companies that also have high levels of turnover. While this may or may not reflect causation, it does reflect a correlation between high overtime and turnover rates. 

For many businesses, overtime is an unavoidable and sometimes beneficial part of doing business. However, it is important to consider the total picture of the impact that overtime is having on our organization and our employees.  Consider the impact their hours are having on their health, safety, productivity and morale. Be on the lookout for the possibility of a self-perpetuating cycle of high overtime that is negatively impacting your company. And find ways to take the temperature on the morale and productivity of employees, so you can determine where adjustments might need to be made for your organization. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for legal advice. If you have any legal questions regarding this content or related issues, then you should consult with a labor attorney for advice.

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