How to Manage Overtime in Manufacturing & Retail

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Poor overtime management can cost a business in many ways. Whereas there are a number of things one can implement to improve managing overtime in the workplace, very few business people (especially in retail and manufacturing) don’t understand the most effective ways

If you are a manufacturer, retailer or familiar with manufacturing or retail you will agree with me that  it was shelling out for nearly four hours of overtime per week for each employee, or about 500 hours a year.  To standard that was the average for most manufacturers/retailers. 

Overtime is expensive, and not just from a payroll perspective. It can lead to increased product recalls, which also hits your business revenue hard.  So, How do you keep your shifts fully functioning without burning out your employees? Or cratering your budget due to out-of-control overtime costs and reduced product quality?

It’s a huge question, but it’s one we can help you answer with something much simpler than you’d imagine. You can cut your overtime costs and improve employee satisfaction with a few simple changes.

1. Analyse what’s happening 

Let me take this opportunity to let you know (unless you didn’t know) that overtime is one of those things in a business that sneaks up on you until it’s  repeatedly and if taken for granted it can get to a point when its too late to fix. Better management of employee overtime starts by understanding the data behind the overtime problems you have. “If you can’t track it, you can’t change it”.  I am sure you have never thought about this but it has hit your mind hard now.  

Which employees usually take the extra shifts?   How much overtime is being paid out each month? Each quarter? Even yearly? Turn a vague understanding of who’s a hard-working employee into concrete information that can be used for planning.   Start by taking a look at your historical data. Look for trends. Have they been increasing? Do you see a seasonal pattern?

You need to track all this early.  Have a tracking system that gives this data often in advance before problems come up. It’s hard work, so get this information early in advance, package it, sit down and interpret it.  Here is an awesome secret;  When such data is easy to access, you have the right foundation for reducing costs at your manufacturing plant or retail store. Knowing the data must come first. You can’t plan if you don’t know. 

2. Be Proactive

I won’t spend much time on this. But you well know what proactiveness does.  It applies to overtime management too.  It saves much. It is good anywhere in management and same here. Planning and acting proactively helps companies in avoiding negative impact surprises and helps preparing for the future so as to reduce your expense, protect the company from legal action from disagreements and annoyances of employees, and also improve morale.

Employees are human beings and when proactively informed about overtime schedules they can plan their family time, social life, work life and other important aspects of their living which gives them morale all the time in return. Needless to say more, be a proactive manager or business person that responds in advance instead of reacting to situations already at hand. 

3. Automate 

Automation can be a huge help, not just in time saving, but in direct cost saving. Simplify your operation schedule and keep employees happy.   Generally, companies distribute overtime based on various work practices, seniority, or union contracts.

This isn’t an easy thing to manage, and a fair distribution of available overtime often ends up relying on a supervisor to write down overtime hours on a piece of paper or plug it into a spreadsheet then distribute it. Sometimes they can forget and distribute it a little late and this hinders employees work plans. 

Even worse, for many manufacturing plants, they are obligated to print out and post schedules in break rooms and service shops, making it accessible to all employees. Every time there’s a change, those documents need to be switched out.

Relying on a pen and paper or verbal communication is both inconvenient in the time it takes to communicate the information, and also when it comes time to gather that data for use in planning. Automated scheduling would be much better. 

4. Improve Communication 

You will agree with me that one of the best ways to effectively manage overtime is to improve communication on schedules, expectations, stakeholders and key principles around it.   Make expectations, schedules and principles clear to employees, managers, facility managers, etc. 

There are many unspoken rules about overtime in most companies a reason as to why you will find companies making huge blunders unknowingly. If it is overtime without pay, make it clear.  Because if not clear, no matter how good your employees’ hearts are, wrong expectations eventually affect morale and transparency within the company and takes everything to a negative spiral. 

It is very important to clarify your expectations around everything that deals with overtime.  How shall they receive notices, in what time?  From who?   What is their provisions of support? etc. Be clear.  Many companies expect employees to be available to respond to communication any where and anytime, if not well communicated, you may be shocked to find no one responding your calls or email when they didn’t get better addressing to how communication and when shall be coming in. 



Poor overtime management can be a biggest hindrance for most companies. The way any business approaches it defines the difference between avoiding or allowing expensive lawsuits, high labor payment expenses,  low morale, and vulnerability to losing workforce structures. 


You may need assistance in managing overtime at your store or plant, Contact NBK-PREMIER SOLUTIONS LTD, Uganda’s best business and investment consultancy firm,  to assist you. Contact them HERE


Nicholas K. Quest

I am a Ugandan born transformational Author, social commentator, publisher, consultant, serial entrepreneur and an optimistic peak performance trainer. From economic-social issues, citizenry & human transcendence, I radically create strategies, publish books & programs, initiate projects, concepts and ventures that elevate key systems for shaping humanity’s future, productivity and outstanding corporate and individual legacies. With a transcendent approach, I identify opportunities from the crowd & proactively put them forward into ideas & solutions for people, organizations, and projects. Let's work together to elevate key systems for humanity's extraordinariness and productivity >>>>

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