Uncovering overtime costs with attendance & timesheet data
Overtime can creep up unnoticed in many businesses, pushing labour costs higher and impacting employee wellbeing. With reliable time management tools, such as clocking in and out functionality, timesheets, manager approval processes and analytical reporting, HR leaders can significantly reduce overtime costs, improve accuracy in pay, and boost transparency and consistency.
The scale of the overtime problem
In 2023, 3.8 million UK workers did unpaid overtime, averaging 7.2 unpaid hours per week. That’s equivalent to about £7,200 in unpaid wages for each affected worker.
Nearly half of UK employees regularly work unpaid overtime, with the average amount being just over 3 hours per week.
These figures demonstrate two things. Firstly that overtime is widespread, be it paid or unpaid, and secondly, that many organisations lack accurate systems to record, detect and manage overtime adequately.
How does time and attendance software reduce overtime costs?
Here are some of the ways that effective time and attendance software can deliver on overtime cost savings:
Accurate time capture
Clocking in and out ensures that you capture actual worked hours, rather than relying on estimates or memory. When employees are asked to record their working time in this way, late arrivals, staying late or leaving early become visible, and are all accurately tracked. This reduces any risk of overpaying for overtime that didn’t happen and helps you identify when the use of overtime seems to rising for certain individuals or teams in your organisation, alerting you to potential resourcing issues.
Timesheet approvals and manager oversight
Requiring employees to fill in online timesheets ensures that overtime, or excessive hours, are highlighted. By having managers review and approve employee-submitted timesheets, you can ensure that overtime doesn’t go by unchecked. This gives HR better visibility and control, with managers able to question or reject extra hours than seem unjustified or inaccurate.
Tracking projects using timesheets also gives you valuable insight into how well a department is functioning and how long routine tasks take on average, helping you to workforce plan for the future and deal with arranging cover for absent employees more effectively.
Transparent reporting and dashboards
Data from timesheets and attendance logs help spot patterns. For example you might notice the same employees always working extra hours, days of weeks with spikes in overtime usage, or departments that are under-resourced. Reporting on working hours allow you to take proactive interventions where needed, such as redistributing workload or hiring temporary cover rather than relying on overtime.
Employee awareness, ownership and accountability
When employees know their clock-in times, breaks, and total hours will all be reviewed, there is often grater discipline around finishing work on time. Employees will gain a clearer understanding of when additional hours will be paid or need approval, and be appreciative of a fair system that remains consistent for everyone. Having time and attendance software in place can bring about ownership for an employee over their own work time and how they use it, and lets them see exactly where their efforts are contributing to the wider team.
First steps to reducing overtime costs
Below are some practical steps that HR leaders can take to leverage time management data and use it to reduce overtime costs:
Audit current overtime
Run reports from timesheets over the last 3-6 months to see who is working extra hours, when, and why.
Set clear overtime policies
State what qualifies as overtime, what rate is paid, who approves it and when. Ensures employees and managers are clear on the policy.
Enforce workflow approvals
Ensure that timesheets are submitted on time, and reviewed and approved in a timely manner. Utilise a tool such as our Workflow Builder to set up automated workflows to make sure these processes happen.
Use data to identify recurring themes
Identify departments, days, times of the year, or individuals with recurring overtime and investigate the root causes of these spikes.
Monitor and review
Track your overtime cost trends over a longer period (12 months for example) and report to senior leadership, using data insights to make business decisions about your workforce.
Reducing overtime costs doesn’t require complex scheduling tools. With well-implemented time management software that provides clock in clock out functionality, timesheet submission, and managerial approval, you can gain greater visibility over your teams. You’ll know who is working and when, improve fairness and consistency, and be able to make data-informed decisions about the future of your workforce.
