July 25th How to reduce your business budget: Trim unplanned overtime
“Every problem is a gift – without problems, we wouldn’t grow.”
Tony Robbins, author, coach, speaker, and philanthropist
Identifying and resolving business problems is an essential aspect of running a company. Every business has its own problems, but a common concern among business owners across all industries relates to financial growth. It is almost impossible to grow financially if the company is constantly dealing with budget issues.
But as Mr. Robbins mentioned, such a problem can be viewed as a way to help the business owner grow. Identifying and resolving budget concerns can help you improve your business efforts and transform the way you manage your workforce.
The problem: unplanned overtime
For most companies, labor is one of the most expensive aspects of the operation. But while you can plan for scheduled work hours, overtime can quickly throw into your plans, especially when it isn’t planned for. Unplanned overtime can quickly eat away at profits, making growth and financial success more difficult to achieve.
The Bureau of Labor Statistics reports that the average American employee is employed Four hours of overtime per week. Since labor laws require overtime to be paid at a higher rate, those four hours a week (which translates to 200 hours a year) can cost the company a lot of money. For example, if an hourly worker receives a standard rate of $15 per hour, four hours of overtime at half time results in an additional $90 per week, or $4,500 per year. Multiply that by the number of workers per hour, and you can see how unplanned overtime can wreak havoc on the business budget.
The solution: automate your timekeeping
Most hourly workers track their time in some form, either manually or through a time clock that scores punches. But if your business currently relies on manual tracking methods, you may be paying more. Time theft is a real problem that affects companies of all sizes, and it’s especially worrisome when employees report overtime, since the pay rate is higher.
Automated timekeeping is the solution to time theft, and using a watch that certifies each employee prevents buddy punches. The result is accurate data that does not include stolen time. But choosing a more advanced timekeeping solution can also prevent employees from working overtime when they are not authorized to do so. With the right system in place, you can change the way you manage employee time.
In our article next Tuesday, we’ll cover three additional ways automated timekeeping can reduce unplanned overtime and help companies stick to their labor budgets.
This information is provided on the basis that Payroll Partners does not provide legal, human or other professional advice or services. Professional advice on specific issues should be sought from an attorney, HR consultant or other professional.
