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5 ways to reduce overtime costs by harnessing data

Reducing overtime costs is a top priority for thousands of businesses. Overtime in some form or another is usually unavoidable, but ideally it will be mutually beneficial - with businesses maintaining sufficient staff levels and employees rewarded for their time. However, when overtime becomes too common an occurrence it can cause workforce costs to spiral and margins to become thinner.

Overtime is also extremely inefficient - the longer hours staff work the less productive they are. If your organisation is overspending on overtime, it doesn’t have to be this way forever. More efficient management of workers and resources can have a very positive impact on the number of overtime hours you have to pay. The problem is identifying where these efficiency savings can be made and moving quickly to make them.

This is where data comes in. Recording staff attendance and by implication the overtime hours worked, and why they’ve been worked, provides all of the data needed for interpretation with actionable insights. This can deliver big results that can seriously improve your bottom line.

1. Automate Time Recording

The first step towards cutting spend on overtime is making sure your organisation’s attendance and overtime data is as accurate as possible. Workers manually uploading timesheets at the end of each week is commonplace in many industries - but it can lead to some serious inaccuracies. This is usually completely innocent on the part of the employee, but if every member of staff overestimates their hours worked by 10 minutes per day, this can add up to a big overspend for the business. Importantly, employees are not often in the best position to define the cause of any overtime.

Implementing automated time recording stops this kind of overspending in its tracks. Automated clock-in/clock-out functionality lets businesses track hours worked to the minute, allowing them to compare real hours worked to rostered hours much more easily, automatically identifying overtime at source. The best time and attendance systems allow workers to clock in using a range of input devices that suit the working environment - from biometric scanning to telephony or a mobile app.

Ensuring time recording is automated at the point of collection also allows data to flow in real time, allowing managers to make quick and informed decisions on staff scheduling. Find out more about how time and attendance data can help you reduce absenteeism.

2. Develop a Plan to Reduce Absenteeism

A level of absenteeism in the workplace is inevitable. If it’s well-controlled and operating within reasonable limits, the effect of absenteeism can be mitigated by good staff planning.
But unforeseen or unauthorised absence can have a serious impact on a company’s ability to deliver its products and services, which in many cases leads to a rise in overtime or an increase in temporary staff. Both options can be expensive.

Every effort should therefore be made to keep levels of absenteeism within reasonable limits. A good time and attendance system helps to do this by recording the incidences and causes of absenteeism in great detail. And more importantly, providing absence analytics that put a spotlight on the root causes of absenteeism, promoting a culture of continuous improvement. Very often, every hour that someone is absent means that someone else has to cover their work, usually at a premium overtime rate.

3. Understand and Forecast the Demand for Work

An organisation’s busiest periods can often cause understaffing, stressed workers and more overtime being required. By harnessing historical production and sales data, businesses can forecast peaks and troughs in the demand for work in advance, enabling shifts to be adjusted and staffed, minimising the need for premium overtime. Annualised hours theory can be applied to much shorter time periods but the objectives and the result can be the same - schedule staff to work a little longer during peak periods and give time off when the demand for time is lower.

Bringing in new scheduling strategies will therefore help to ensure optimum staffing levels are maintained during busy times. For example, scheduling employee shifts to overlap can smooth out periods of low staffing between shifts and give more protection against unexpected absence.

Forecasting further in advance also allows managers to prepare for having to bring in agency staff. Of course, all organisations want to keep agency spending to a minimum but when used correctly it can save more money by preventing large amounts of overtime from having to be worked.

4. Roster Staff More Efficiently

The reason so many businesses overspend on overtime is because of inefficiencies in the planning of their workforce. Often, this comes from poor scheduling or rostering. Once an organisation has truly accurate time and attendance data, this can be combined with information about employee availability and employee skills. This allows managers to get the right staff in the best roles for them as often as possible.

Using data on hours worked also allows you to ensure certain teams, departments or individuals aren't being overworked. Workloads that are too heavy make overtime almost inevitable and reduce productivity leading to even more inefficiency. Organisations that use data intelligently can balance work between departments more evenly and can easily spot the areas where employing more staff may be more efficient in the long run.

5. Get an Accurate Oversight of Overtime Spend

Every business will have inefficiencies in their everyday workflows, and minimising these can go a long way to reducing the need for overtime. When overtime data is segmented by activity, businesses get a far better overview of where overtime spend is occurring and why. These kinds of insights can be invaluable for helping spot areas where overtime is being used inefficiently - perhaps where tasks are taking too long to complete and where staff require additional help or training.

Using workforce analytics can highlight overtime hot spots and adverse trends. Often, a large proportion of overtime spend is accounted for by a handful of workers. The more accurate and easily accessible attendance and overtime data is, the quicker these patterns can be flagged up. This allows managers to identify the root causes of excessive overtime costs and fix the problems at source.

Reducing overtime costs with Crown’s smarter Workforce Management System

In order to gain true visibility over workforce efficiency and drive down unnecessary overtime costs, organisations need access to accurate sources of information and the right tools to interpret them. Investing in a smarter workforce management system can help your business achieve this.

Crown harnesses the power of data to help you make tangible improvements which result in real cost savings. Some of our solution’s most important features for helping you reduce overtime costs are:

To learn more about how Crown Workforce Management can help your organisation significantly reduce overtime expenditure, get in touch with our team today!

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