We have been casual about recruiting workers to do overtime. We have plenty of work and it's difficult to get people in. How do owners deal with the usual banter about OT versus new people, and the like? I'm about to make it policy that we work 1.5 hours OT Monday through Thursday. Does anyone have any thoughts about enforcement, moral, when to let someone go for failure to show, etc? We manufacture office furniture in the NE and have approximately 20 men and women on the plant floor.
(Business and Management Forum)
From contributor S:
I know this will sound a little backwards, but it worked for us. We instituted a four day work week. We work four ten hour days so we have a three day weekend every weekend and sometimes four days depending on holidays. We found that we get more work done in four days than we were in five days. If at the end of the week we are still behind then we can come in on the Friday and still have 2 days off.
Our employees are well rested after three days off, so we think that’s why we get more work done. I think starts and stops are also at fault for slowing things down, and with the extra two hours a day we get more .The other advantage is that you tell your employees to make dentist appointments, go to the bank, etc. on Fridays so they don't have to take time off of work.
When it comes to hiring people see the three day weekend and are intrigued. As an owner the benefit to you is you can go in on Friday and get a ton of work done because there is no one to bother you, and you also still get two days off. The customers also get used to the idea that you are not around on the Fridays so it’s never really a problem either. I use the fifth day to order and pick up materials and see customers so on Monday things are ready to go. Maybe it wouldn't work for you, and most people are quick to say "it would never work for us" but we have yet to find the down side to the four day week.
The other thing to remember is your operating costs are slightly lower because you only have to power up all your lights and machines four days a week instead of five. That is very minor but over time it adds up. I once worked for a company in Montreal that had a three day work week where they split the staff and worked three twelve hour days. They were there six days a week.
With an 8 hour workday, you get 2,300 work minutes per employee per week. (8 hours = 480 minutes - 20 minutes mandatory paid break time = 460 minutes x 5 days = 2.300).
With a 10 hour workday, you get 2,280 work minute per employee per week (10 hours = 600 minutes - 30 minutes mandatory paid break time = 570 minutes x 4 days = 2.280).
This is bean counting, but it adds up - 20 minutes per week per employee. Also, I agree completely about avoiding mandatory OT for any prolonged period of time.
No matter what choice you make nothing works perfect for everyone. I like the four day week and would never switch back. I did my employees would revolt. Overtime is one of those things that loses you employees if not treated correctly. The shop down the street from me says his employees would not work five minutes of overtime. I am not sure what he is doing to warrant that but in some hiring markets I can see that happening .
There might be some diminished productivity from those last two hours but there might also be some benefits from the extra day off each week. All other things being equal, if I was a wage worker I would prefer a four day work week to a three day work week.
However, we digress. The question was how to sell this idea to the crew. He wanted our thoughts about how this would impact morale and how to organize and enforce policy.
If overtime was mandatory, I would sit the crew down and explain what you want and why you want it. I would then ask for volunteers. I would make the statement that if I cannot meet my staffing needs I would shift to plan B.
We ran two shifts for a while several years ago. I passed out a calendar to everybody and had them fill in the hours they preferred to work. As you could guess, everybody wanted 8-5, Monday through Friday. I gave them the calendar again and told them what I needed and told them if they couldn't figure it out amongst themselves I would fill out the calendar. The problem got solved and nobody grumbled too much. As for enforcement of any policy, you have to be consistent. If you are not, bad things will likely ensue.
Guys have families and their own lives. If they wanted to be chained to the shop they would open their own. The reason they work for someone else is for a steady paycheck and schedule. If you decide to make OT mandatory I would guess you will see the same drop in moral and probably reduced output. That shop was also in the NE and had about 30 guys on the floor, just for comparison sake.
If you calculate all the expense you will incur with an additional employee - training, cost of turnover, health insurance, etc, you might find you can pay twice the hourly rate for overtime and still come out. Just a suggestion, but run the numbers as this might raise the level of motivation some.
I'm not sure what the big deal is about working more than 40 hours anyway from an employee standpoint. It seems to me that I used to love the extra money. From an owner standpoint, unless you have crappy margins on your jobs, overtime won't hurt your bottom line much, if it does at all because your volume will go up.