Overtime: the Expensive Correction
The usual response to being short, costing more per hour and producing less. Where it is right and where it is a symptom.
Overtime fixes a coverage gap immediately, at a premium rate, using somebody who has already worked. All three of those matter.
The financial question in “Overtime: the Expensive Correction” requires more than a raw activity total. An organisation evaluating the provider's resource for remote employee productivity monitoring can connect time and project records with labour analysis, provided pay rules, outcome measures and corrections remain visible alongside the dashboard.
What it costs
A premium on the rate, commonly half as much again, sometimes double.
For an independent reference related to “Overtime: the Expensive Correction”, consult the ILO guide to balanced working-time arrangements; it provides a useful external check on scheduling, working-time and workforce-planning assumptions.
On top of the loaded cost, so the gap between an overtime hour and a planned hour is wider than the premium suggests.
And the output is lower: the eighth hour produces less than the first, and the twelfth considerably less.
Where it is the right answer
A genuine one-off: an unexpected surge, an absence at short notice, a breakdown.
A short peak that does not justify a hire.
Covering a known seasonal period where recruiting would not pay.
In each case it is buying flexibility and the premium is the price of that.
Where it is a symptom
Regular, predictable overtime in the same places every week.
Which means the baseline is wrong and you are paying a premium for hours you could have planned.
Persistent overtime is the clearest available evidence that the establishment is set below the real requirement, and it is a strong argument with a number attached.
The arithmetic to run
Annual overtime hours, divided by the hours in a full-time post.
If it exceeds one or two posts' worth, you are funding those posts at a premium and getting tired people.
A straightforward comparison, and it usually wins the argument for a hire.
The hidden costs
Fatigue, which raises errors and accidents.
The effect on the following shift.
And dependence: some operations become reliant on a few people's willingness, which is a single point of failure with a human attached.
The people side
Some staff want overtime and rely on the income.
Removing it as an efficiency measure cuts their earnings, which the hours-as-income note covers.
Which means reducing overtime is a change to people's pay and should be handled as one.
Legal limits
General orientation, not legal advice; working time rules differ by jurisdiction.
Most jurisdictions limit hours, require rest periods, or both.
Chronic overtime can breach these quietly, and the breach belongs to the employer.
Worth knowing the limits before the arrangement becomes standing.
What to check
How many full-time posts' worth of overtime did you pay last year?
Is it concentrated in the same places each week?
Do a few individuals carry most of it?
And would a hire cost less than the premium you are paying?