Las Vegas Sun

March 28, 2024

Study: Overtime’s value often negligible

Charles Garner likes to work overtime hours because of the extra money.

As a maintenance worker at the Luxor and member of the Operating Engineers Local 501, Garner makes $21.69 an hour. He said it's hard to balance the desire to earn more money and the need to rest and spend time at home.

"My wife forgets what I look like," Garner said. "It's usually 6 a.m. to 6 p.m. I get home, I take a shower and go to sleep."

Carol Herrington, incoming president of the Southern Nevada Human Resource Association, said workers often appreciate the extra hours and the money it brings, but there needs to be a limit.

"A lot of people like extra overtime and money, but you get to a point where money is not enough," Herrington said. "It's a work-life balance thing. That's becoming more and more important to employees."

A study performed by Lexington, Mass.-based research firm Circadian Technologies Inc. shows that companies that work their employees outside of the hours of 7 a.m. to 7 p.m. and allow their workers to work excessive overtime suffer financial consequences due to lower productivity, increased turnover, absenteeism, health problems and safety issues.

"We're not designed for night shifts or long extended hours," Alex Kerin, senior consultant at Circadian Technologies, one of the study's authors said. "All of our major biological functions follow a 24-hour schedule. When you start to ask people to work at other times we begin to destruct our biological functions."

The study is based on the responses from managers of 397 companies in the U.S. and Canada. Those companies employ more than 129,000 full-time shift workers, or workers who work outside of the hours of 7 a.m. to 7 p.m. Kerin said as the economy has emerged from the recession, demand for products and services has grown but the number of employees hasn't grown to the levels they should have.

"The government thought there would be large increases in job growth; the growth has been much slower," Kerin said.

The Bureau of Labor Statistics reports that one in five American workers or 24 million people regularly work full- or part-time night or weekend shifts. About 50 percent of those workers are white-collar workers. The study showed that the companies surveyed increased the amount of overtime their workers performed from 12.6 percent in 2003 to 16.2 percent in 2004.

"They're getting to the point where they're almost working an extra week," Kerin said.

He said companies should investigate what affects shift work and excessive overtime has on workers and on the company's bottom line.

The study showed that the average cost of turnover to the companies who were surveyed per employee is $30,116, and that companies that work their employees outside the hours of 7 a.m. to 7 p.m. experience 9.8 percent turnover, more than the 3.2 percent average of all companies.

"It doesn't matter how much training you have; you'll still get fatigue," Kerin said. "Often their family and social life can be impacted. There are higher levels of drinking and substance abuse."

Herrington said the study shows that companies should consider hiring more workers based on their demand.

"It makes sense to add people when you know you've got the work on the books," Herrington said. "You have to weigh two issues. You have to weigh the people issue -- how many hours they're willing to work and (cost). A lot of times overtime adds up to more than the cost to add more people."

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