How to Manage the Complexity of Fair Overtime Distribution
The concept of “overtime” in the U.S. has been around long before the term originated. As far back as 1890, average weekly hours for full-time manufacturing workers could be tracked as high as 100 hours. Although overtime scheduling remains mission-critical, it has since taken a seat as one of several top concerns in the current world of work.
In the future of work , employers will be faced with new challenges. Absenteeism and retention are top concerns as the labor shortage persists, all while hard-to-come by workers are demanding more, namely schedule fairness and flexibility. Add a new, disparate landscape of worker types — part-time, temporary, and gig workers with unique overtime preferences — and scheduling managers can struggle to adapt.
The Need for Fair and Transparent Scheduling
Today organizations are looking at ways they schedule employees with an eye towards worker flexibility and satisfaction. Worker rights groups, unions, and research all highlight the heavy influence work schedules have on worker well-being, employee retention, and productivity. Shiftboard’s State of the Hourly Worker report discovered that nearly 40 percent of surveyed workers prioritized schedule control over monetary compensation — even saying that they were willing to take a reasonable pay cut if it meant gaining more control over their work schedule. Furthermore, 45 percent said they would likely leave their employer over unfair scheduling practices.
From the executive office to the front line, the need for stable, fair, and transparent employee schedules is no longer in question. The critical question now is — how to manage overtime fairly.
In 24/7 large-volume workforces, fair and transparent scheduling is not a simple process to manage, especially when it comes to overtime equalization.
How does Overtime Equalization work?
Overtime equalization is the practice of fairly distributing available overtime shifts throughout a workforce. Providing workers with fair and equal access is one of the most critical aspects of workforce scheduling. By eliminating errors and favoritism in overtime distribution, organizations can better comply with internal policies and agreements, maintain a more satisfied workforce, and prevent burnout and fatigue.
Although many union agreements outline overtime equalization policies, these guidelines are now becoming more common within complex industries in general. In 24/7 and mission-critical operations, overtime is often planned for and designed directly into shift patterns (i.e., the DuPont shift schedule). But overtime can be unplanned too, which adds a new level of complexity when it comes to on-the-fly decision-making around overtime assignments.
To implement overtime equalization effectively, organizations must manage complex overtime rules and track various employee preferences and work statistics. Automated scheduling tools can significantly aid in this process by providing real-time data on employee availability and preferences.
The Challenges of Overtime Equalization
The burden of offering workers fair (equal) access to additional shifts falls on scheduling managers. They must manage complex overtime rules and processes and track and update a multitude of work stats and preferences for each employee. Rules might also be governed by specific workflows within a CBA or other organizational policies. Sorting criteria for determining overtime equalization is wide-ranging and may involve:
- Overtime hours balance
- Overtime refusal hours balance
- Worker OT preference
- Last date overtime was worked or refused
- Seniority by company, plant, or unit
- Year-to-date hours worked
- Pay period hours worked
- Job classifications
- Pre-defined employee rotation order
Performing this kind of sorting process using manual tools is tedious and error-prone due to the volume of the ever-changing data. When errors impact employees, grievances can result. If the worksite is unionized, stewards may launch an investigation to help resolve the matter.
In these situations, it is imperative to have an audit trail that either proves overtime assignments followed guidelines or explains the rationale for exceptions. Manually tracking the schedule history takes diligence and time. Yet, without a complete audit trail to back up scheduling decisions, disputes can lead to monetary penalties and negatively impact job satisfaction.
With Shiftboard’s configurable employee scheduling solution, a Big 3 automaker with over 100,000 employees realized a 93 percent reduction in scheduling errors, which led to a savings of $800/employee per year from wrongful overtime union penalties.
How Technology Can Help
In today’s climate, scheduling complexity only continues to grow. Dynamic operations with changing business goals, industry regulations, and worker expectations call for intelligent, adaptive solutions. Today’s automated workforce scheduling and auditing tools empower organizations to address employee inquiries and back up scheduling decisions with confidence.
Shiftboard sets itself apart with superior OT equalization mechanisms that help organizations alleviate the myriad data sorting required for overtime equalization.
How Does Overtime Equalization Work with Shiftboard?
Shiftboard’s OT tools offer specific functionalities designed to aid in fair overtime distribution, ensuring a balanced and equitable approach. These features include tracking overtime history, setting alerts for imbalances, and allowing employee self-service for claiming overtime shifts.
- Tracking Overtime History: Shiftboard maintains a comprehensive record of each employee’s overtime hours, including overtime worked, refused, and their respective multipliers. This historical data helps managers make informed decisions about future overtime assignments, ensuring that opportunities are distributed fairly and transparently.
- Employee Self-Service: Shiftboard allows employees to view and claim available overtime shifts based on their preferences and availability. This self-service feature promotes transparency and autonomy, enabling employees to have more control over their work schedules. For instance, if an employee prefers to work additional hours on weekends, they can opt for these shifts when they become available.
- Compliance and Configurability: Shiftboard’s highly configurable solution ensures compliance with your specific overtime policies. It can prioritize employees for overtime based on a range of sorting criteria, including overtime hours balance, refusal hours balance, last date overtime worked or refused, seniority, and job classifications. This configurability ensures that the system aligns with your internal policies and labor agreements, providing a fair and transparent process.
- Audit Trails and Transparency: Shiftboard offers robust auditing tools that provide a comprehensive audit trail of scheduling decisions. This feature allows managers to address inquiries and resolve disputes confidently. For example, if an employee questions why they were not selected for an overtime shift, the system can provide detailed records and the rationale behind the decision.
With our intelligent workforce scheduling software, organizations can tailor-fit employee schedules to match their internal workflows — all while ensuring the fair distribution of overtime hours. Our highly configurable solution can help you meet coverage around the clock and understand how to manage overtime fairly so that you can achieve better efficiencies no matter how complex it gets.
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Sean Solomon
Sean is a sales development professional at Shiftboard with a background in information systems. He’s passionate about helping enterprise organizations in the energy and manufacturing sectors maximize their workforce and operational efficiency. Specializing in industries with unionized and heavily regulated workforce operations, Sean understands the need for a highly configurable and strategic approach to employee scheduling automation. When Sean is not working, he enjoys writing, snowboarding, and spending time with his newborn daughter. Connect with Sean on LinkedIn.
