Using overtime

Using overtime judiciously can be good for profits by helping you keep the permanent headcounts down. Overtime can provide flexibility during special projects and periodic peak work periods.

However, overtime as a standard operating procedure, while appearing to be less expensive than hiring more people, is usually a poor management practice. Too much overtime can negatively impact employee morale, even health and safety. It also can lead to increased turnover. And of course, any use of overtime must be done within the bounds of applicable labor laws.

Regardless of how much you use overtime, communicate with employees to make sure it's accomplishing your goals without hurting morale.