How to Handle Overtime in the Manufacturing Industry

You may spend about four hours of overtime each week on average for each employee, or around 500 hours per year.

Nothing requires you to conjure it up in your mind. Most manufacturers were on the same page in terms of pricing.

Overtime hours are growing as a result of an expanding labor shortfall in the manufacturing sector, where over half a million manufacturing positions remain unfilled. We say “was” since overtime hours seem to be increasing as a result of the increasing labor shortage. overtime is costly, and this is true not just from the standpoint of the employer’s payroll. Additionally, increasing product recalls might have a negative impact on your company’s profitability.

The question is, how can you ensure that your shifts go well without exhausting your staff? Alternatively, are you destroying your budget as a result of out-of-control overtime charges and decreased quality of product?

Even though it’s a big question, we can help you find an answer that’s much more straightforward than you may expect: Several easy improvements may help you reduce your overtime expenses while while increasing employee satisfaction.

Recognize the circumstances around overtime.

You may not be aware of the fact that overtime increases your payroll expenditure at the time it occurs.

You don’t realize what you’ve done until it’s too late, and then it’s too late to rectify the situation. Understanding the data that is driving your employee overtime issues is the first step in reducing it. There’s nothing you can do about it if you can’t hunt it down.

Some staff may be familiar to you, such as those who regularly work additional shifts or those that you see on the floor on a consistent basis. How much overtime is paid out each month, however, is something you should know. Is it every three months? Do you want to do it once a year? Create clear information about who is a dedicated employee who can be utilized for planning purposes from an imprecise idea of who is.

Starting with your past overtime expenditures might be a good place to start your analysis. Trends should be observed. Is it true that they’ve been growing in numbers? Is there a seasonal trend that you can identify. You may not be aware of which of your staff is on the verge of quitting their jobs. Why? Because whether they’re diligent workers or not, you’ve most certainly placed too much reliance on them in order to make ends meet.

This should be obvious based on your previous overtime expenses. Hopefully, you’re working with an employee scheduling solution that can supply you with this kind of information, or at the very least, some valuable insight. A conversation with your payroll staff will be necessary if you do not get assistance immediately.

The issue is that if you have to go to your payroll team every time you need this type of information, you’re not going to be able to keep track of your overtime expenses. Putting together the material, packaging it, and then having you sit down and understand it takes a lot of time and effort on their part. Whenever anything is as time-consuming as this, it’s far simpler to just ignore it.

Overtime data is at your fingertips when you use the correct staff scheduling solution. It is simple and straightforward to do an in-depth analysis of labor expenses on your own time. Is it possible to make things even better? When an employee is going to enter overtime, your scheduling program would send you an alert. That is, instead of continually being behind the curve, data is being used to remain ahead of the curve instead.

Here’s the thing: when you have quick access to overtime information, you have a strong basis for lowering expenses in your manufacturing facility, which is essential for decreasing overall expenditures. Data must be understood before anything else. In the absence of information, there can be no planning.

Staffing firms should be used.

You are unable to complete your shifts and do not want to depend on overtime pay for your employees. Consider bringing on temporary employees with the hope of eventually hiring some of them.

Due to rising labor expenses, many firms are turning to hiring agencies as a cost-saving measure. When you’re shorthanded, it’s cheaper costly to hire a temp worker at a normal rate than than paying an existing employee extra. The overtime pay premium is reduced by half when you replace a temporary worker for a position that would have been filled by an employee who would have worked extra hours.

A significant cost saving has been achieved here!

Staffing companies are forming partnerships with manufacturing companies, not just to assist them in keeping control of overtime during a labor shortage, but also to offer data to the companies concerned. In the process of using a staffing business to fill in shift gaps, you’re collecting information on where those gaps occur.

Furthermore, as previously said, collecting labor and overtime statistics is critical.

Employee scheduling may be automated.

In terms of time savings as well as direct cost reductions, automation may be a big assistance.

Most organizations allocate overtime in accordance with diverse work norms, seniority, or labor agreements. When it comes to managing available overtime, it’s not always straightforward, and a fair allocation of available time is sometimes dependent on a supervisor simply writing down extra hours on a piece of paper or entering them into a spreadsheet.

What’s worse, many industrial firms are required to print up and publish schedules in break rooms and service shops, ensuring that they are easily available to all of their personnel. These records must be updated every time a modification is made to the system.

When it comes to documenting and communicating information, using a static spreadsheet or pen and paper is difficult both in terms of the time it takes to do so and in terms of gathering data for planning purposes. It is difficult, from a manual standpoint, to swap shifts, handle time-off requests, and ensure that workers cover shifts.

However, despite the fact that automated scheduling would be much more efficient, surprisingly only around half of firms use scheduling software.

It should be evident if you step back and evaluate everything we’ve stated thus far, whether it’s in terms of having simple access to correct labor data, being able to manage overtime, or knowing when a staffing agency could be a good answer, that the automated scheduling component is essential. Every action and decision is based on this one axis.

In My Line of Work Automated scheduling provides you with sufficient control to ensure that the automation resulting from it is in compliance with your production needs.

Starting with shift specifications, you may ensure that personnel who meet the required credentials are assigned to those shifts. As an added convenience, you may fill in the required hours so that your schedule template takes care of everything automatically, warning you when an employee is on the verge of exceeding the overtime limit.

Simply put, you’ve scored a major victory. If you construct a work schedule on a regular basis, you will have to put up all of the necessary criteria every time.

Also benefitting are your staff.