• Wonolo

There’s always more work to be done.

This is an age-old truth that any business owner knows. There’s always more growth, more customers, and more prestige to gain, but that takes work. Work comes at a cost.

Paying employees extra wages for working overtime may seem like a quick way to increase output. But as quick fixes so often do, it can actually hurt your business in the long run.

Not only does overtime mean that employers pay more for less work, but it also contributes to an unhealthy workplace culture that leads to increased stress, sick days, and higher turnover rates.

Paying More for Less Productivity

Based on research, people are only really productive for 3 hours a day. As the hours drag on, it becomes less likely that those final overtime hours include peak productivity. In fact, requiring long hours is a surefire way to kill efficiency because financial incentives can’t replace human psychology.

Illustrating this point more simply, an IGDA study showed that after eight 60-hour work weeks, productivity ended up being the same as eight 40-hour weeks. This means employers who exercise consistent overtime work essentially pay more for the same amount of work while stressing out their employees and contributing to burnout. In a sense, the extra hours are pointless.

In fact, when the Muse tracked its most productive employees and their work habits, they discovered that these top performers don’t work the standard eight hours a day. Using frequent breaks similar to the Pomodoro Technique, they worked in sprints, focusing intensely for 52 minutes and taking a break for 17 minutes.

Repetitive tasks are especially prone to boredom and reduced productivity because the longer you repeat something, the less attention you pay to what you’re doing. Providing frequent breaks and staying away from long hours is especially important for workers who perform repetitive manual labor.

From the employer’s perspective, asking employees to stay late and work longer hours comes down to paying more for less work. Or as one manager put it, they’re paying 50% more for 50% less. From any financial standpoint, this is not a very smart investment.

Burnout Leads to High Turnover Rates

It’s no secret that consistent overtime will inevitably result in burnout. But as it turns out, “burnout” isn’t just about being tired, sleep-deprived, or less productive. It can actually be fatal.

Research conducted by the University College London and the Finnish Institute of Occupational Health found that people who worked three hours or more than an average seven-hour workday carried a 60% higher risk of developing heart disease. This was striking because the increase didn’t happen with one or two hours of overtime work; only when it jumped to three hours did the probability rise.

When professors from Harvard and Stanford set out to write a paper on the correlation between the cost of healthcare and stress at work, they found that workplace stress led to 120,000 deaths and $125 to $190 billion a year in the U.S. For employers, this is a big problem because stressed out and unhealthy employees take more sick days, are less productive, require colleagues to take over their absences, and ultimately cost employers as a result. Continue this cycle and it can lead to employees leaving for better working conditions, contributing to a higher turnover rate for the company overall.

For jobs in the manufacturing and warehousing industry where occupational hazards are common, burnout is even more of a problem because of the physical threats it poses. Since humans aren’t wired to work constantly and require rest to function properly, long hours only increase the chances of accidents.

A study from the Journal of Occupational and Environmental Medicine found that employees who worked overtime faced a 61% higher risk of accidents across multiple industries, suggesting that improper scheduling was at fault rather than the work environment itself. This aligns with the three causes of burnout as outlined in the book Time, Talent and Energy:

  • Excessive collaboration
  • Weak time management disciplines
  • Tendency to overload the most capable with too much work

In a recent employee engagement survey by Kronos and Future Workplace, 46% of respondents said employee burnout was responsible for turnover rates of up to 50%. Too much overtime work was the third biggest reason for burnout.

Alternatives to Overtime

Thanks to the changing job market, there are more effective solutions to increasing output than overtime. If long hours decrease productivity, one alternative is to find fresh workers who can focus well for the few extra hours you need for your business.

By hiring contract workers, you can get maximum efficiency at no extra cost. Freelancers don’t require overtime wages, and their productivity levels aren’t affected by a full day of work at your company.

To use a sports analogy, it’s like calling someone fresh from the bench to join the game for the last few minutes. These players are free of sweat and full of stamina to take over from a tired player who’s been running in the field for most of the game. Though they may not be the most experienced or skilled, employing them is a better strategy than dragging on a tired player who can’t perform their best.

As of 2020, freelancers make up 35% of the U.S. workforce, which means there’s a larger pool of freelancers ready to take on the work than ever before. Finding a platform like Wonolo where you can find and establish relationships with a few freelancers who can perform overtime work is a great force multiplier that will ultimately save you money, improve employee retention rate and increase productive output for your business.