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Unpaid overtime: what’s the real cost??

More than a quarter of employers report that their people are clocking up increasing amounts of overtime and over 60 per cent say that those extra hours are unpaid.

Pressure on organisations to increase productivity means that existing teams are being asked to do more work with the same number of heads. If not managed carefully, this has the potential to cause workplace stress and employee burnout, therefore costing a lot more in the long run.

There could be a very good business case for adding permanent headcount or using a temporary staffing solution instead and there are some fantastic candidates available right now. Employers need to keep monitoring not just overtime but absenteeism and attrition rates so they know what all that overtime is really costing.

In a survey conducted for the annual Hays Salary Guide, 1,600 employers were asked about the amount of overtime or extra hours being performed by their employees over the past year. Only 11 per cent had managed to reduce overtime with 63 per cent saying that the level of overtime or extra hours being performed inside their organisations had continued but had not increased.

Of particular interest was the 26 per cent of employers who told us that the amount of overtime being performed by their employees had increased in the past year. Of those, 37 per cent said the amount of overtime had increased by up to five hours a week and 35 per cent by five to 10 hours a week. A further 10 per cent reported that the level of extra work had increased by more than 10 hours a week.

But it is clear that Australian workplaces have not yet found a balance that helps employees combine their work responsibilities with the other responsibilities in their lives

The Hays Salary Guide also revealed that 62 per cent of the overtime or extra hours was unpaid.

Employers are looking for maximum productivity from their existing workforce. The fact that so much of the overtime is unpaid creates the potential for issues around employee engagement and even rising absenteeism due to illness or stress.

At Hays we recommend that employers take a number of steps to help manage employee engagement during sustained periods of increased overtime.

These include:

• Actively monitoring the amount of overtime being performed and by which team members as well as absenteeism and general employee wellbeing;

• Remaining open to adding permanent headcount as a way of increasing productivity and reducing the risk of existing employees leaving;

• Using temporary staff to relieve pressure on overtime hot spots;

• Actively encouraging managers to use regular feedback, paid rewards and unpaid rewards to recognise those employees putting in the extra time;

• Monitoring business activity so staff can be given time off in lieu where possible.

Based on feedback from our candidates, improvement to their work-life balance would make them professionally and personally happier. But it is clear that Australian workplaces have not yet found a balance that helps employees combine their work responsibilities with the other responsibilities in their lives. How can your workplace manage overtime more effectively?

For your copy of the 2013 Hays Salary Guide, please contact Hays in Canberra on 02 6257 6344. www.hays.com.au

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