5 Ways to Effectively Manage Employee Overtime

Manager working on a computer
Andrea Arrizza
February 1 2024

Managing overtime in the workplace is no easy feat. Having to plan, track and ensure it doesn’t affect your bottom line can be challenging.

It is a somewhat unavoidable expense, but one that requires a healthy balance to avoid excessive overtime, expensive workforce costs, and burnout, especially during a labor shortage.

Having the right strategies and tools in place can help streamline your overtime management, keep your budget in check, and above all, increase workplace productivity and improve employees’ mental health.

But first…

What Is Considered Overtime?

Overtime hours indicate the amount of time an employee works beyond their normal work schedules. These hours are subjected to the labor laws in place depending on the country, and they often lead to overtime pay.

As such, overtime can be difficult to manage and need to be handled with the right practices to avoid absences and situations of employee burnout in your teams.

When Should You Use Overtime?

Using overtime should not be the norm, but here are a few instances in which it can be essential for your organization:

  • Busy periods: During periods of increased demands or in the context of important projects, your employees may need to work extra hours to meet deadlines.
  • Unexpected workload: You might experience sudden peak workloads that require additional efforts from workers.
  • Seasonal fluctuations: Some industries experience seasonal in demand, which can lead to overtime.
  • Training situations: When employees need to be trained on specific processes or systems, they might work beyond their regular working hours.

5 Ways to Manage Employee Overtime Hours

1. Plan Ahead of Time With Smart Scheduling

Overtime management starts with smart scheduling. As a manager, it is important to identify busy periods and know who is available and when. Evenly distributing the workload among employees goes a long way in avoiding mishaps like John having to work overtime to fill Sam’s shift because they forgot to share their new schedule.

Yet, despite your best planning efforts, last-minute scheduling changes are inevitable. Spur of the moment overtime can get costly real fast. In times like these, an automated scheduling system like can help control your labor costs by easily finding a qualified employee to replace an open shift amongst those who are still under your overtime threshold. All it takes is creating a set of custom rules and letting the app handle the rest for you.

By keeping an eye on your staffing budgets and customized business needs, you will make sure that you have the right employee(s) in the right place at the right time. That way, you will spend less time in reactive mode and more time being productive.

2. Keep Track of Overtime With Smart Timeclock Technology

Keeping track of employees’ hours can easily become a headache, especially if you’re running a large organization.

With a mobile and web-based system that requires employees to clock in and out, smart punch technology takes care of the monitoring for you.

From keeping track of who is working overtime to employees reaching their allotted hours and abusing the overtime policy, smart punch technology ensures your schedules stay on budget and are optimized to meet your workforce needs.

To keep an eye on your profitability at all times, you can even set and track budgets by position.

Folks is also a great tool to manage overtime with customizable timesheets and integration with payroll software.

3. Customize Your Overtime Rules and Reward Employees With Shift Premiums

Whether you have a shortage of workers or want to reward your loyal employees, sometimes it is in your best interest to offer overtime to specific employees.

With an all-in-one HR software, managers can easily keep employees’ profiles up to date to ensure the most deserving employees get dibs on overtime based on their performance, seniority or job status. This information from your employee database software can then be passed along (automatically, of course!) to your scheduling solution and applied to your business rules. That way you can reward your hardest-working employees with 1.5X and 2X the hourly rate.

Not only do these OT expenditures increase your productivity and keep your business running, they also become an investment in your employees’ happiness. If you cannot avoid overtime, why not make it as profitable as you can?

With Evolia, you can create custom rules for different employee groups, apply them automatically and choose how they interact with each other. For example, if you have trouble filling certain shifts or want to reward your hard-working staff, you can add an hourly bonus, multiplier or fixed amount onto their shift using shift premiums. To get the most out of your workforce and scheduling experience, you can easily integrate your data onto Folks and Evolia without worrying about double entries.

4. Allow Flexible Scheduling to Avoid Unplanned Overtime

If there is anything the great Resignation taught us, it is how flexibility is no longer a “perk” but a necessity. Indeed, a healthy work-life balance is key to productivity and one of the core drivers of employee engagement.

Offering employees the opportunity to choose the shifts they want to work allows them to plan around their personal commitments like picking up their kid after school or attending their doctor’s appointment.

This increased flexibility reduces the need for last minute replacement which often results in their colleagues going into overtime.

5. Invest in Cross-training

In the hourly workforce, being a jack of all trades comes in handy in more ways than one. With a shortage of workers, the last thing you want is to have the same employees being forced to do overtime because they are the only one with the suitable skillset.

A complete HRIS solution for Canadian businesses like Folks HR can help you document your employees’ training and qualifications, which can later be passed over to your schedule management software to manage assignments in all situations.

By training everyone in different roles, employees can adapt and step in when necessary. Whether it be needing someone on the floor or running a specific production line, employee mobility can help you streamline assignments towards other qualified employees when the shift’s owner is unavailable. Your open shift dilemma will be solved in no time!

Managing overtime doesn’t have to be challenging. By planning ahead and using the right tools in place to monitor and track overtime, you can optimize your processes to reduce expenditures and get time back on your side!

If you’re interested in learning how to streamline your overtime management, contact Evolia today for a free demo.

Article written by Andrea Arrizza, Content Manager at Evolia.

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