Tip of the Day

Overtime

Twenty years ago, I took over a hotel operation that was failing for a host of reasons. As I began to dig deeper and deeper into its problems, I discovered that the previous year the hotel had amassed over $150,000 in overtime pay. While this was a concern, I understood that some level of overtime is necessary, and in many cases is the appropriate response to sudden spikes in work or the unexpected absence of employees.

But what I discovered next was truly appalling – that no one was questioning, or even monitoring, overtime hours. At the next staff meeting as a priority I directed every department head to monitor, control, and report overtime hours to me on a pay period basis. Almost immediately, we cut overtime hours and pay in half, with further improvements in subsequent pay periods as managers began to analyze and revise their staffing schedules.

Pay close attention to your overtime on an ongoing basis, question each department head on why they have overtime, and challenge them to find a better way to organize and staff their workload.  Overtime is a premium cost you don’t have to incur.