Reluctance to hire new workers as economy rebounds takes a toll on absenteeism, turnover
Employers in the United States relied heavily on overtime this year instead of hiring new employees as the economy rebounded, according to a report by payroll firm Circadian.
To meet increased demand, many employers relied on a “staggering amount” of overtime from their existing workforce, according to Shiftwork Practices 2005. Circadian said the reliance on overtime is costing companies dearly in the areas of safety, absenteeism, turnover, payroll and customer satisfaction.
Some highlights from the report:
•Overtime increased in 2004 to a rate of 16.2 per cent, equivalent to almost an extra day of work per week (6.5 hours) from 12.6 per cent in 2003.
•Companies with high rates of overtime also reported high absenteeism (17 per cent absenteeism versus nine per cent for those with low overtime.) Overall, absenteeism increased from an average of 5.8 per cent in 2003 to 12.4 per cent in 2004, an indication of the dissatisfaction, stress and fatigue that overworked employees feel.
•High overtime rates were also found to correspond with high turnover rates — 11 per cent turnover in high-overtime facilities versus eight per cent in low-overtime facilities.
•Companies with high overtime rates had more than double the workers’ compensation claim costs per employee (more than $600 US per employee) than companies with lover overtime rates (about $300 US.)
To meet increased demand, many employers relied on a “staggering amount” of overtime from their existing workforce, according to Shiftwork Practices 2005. Circadian said the reliance on overtime is costing companies dearly in the areas of safety, absenteeism, turnover, payroll and customer satisfaction.
Some highlights from the report:
•Overtime increased in 2004 to a rate of 16.2 per cent, equivalent to almost an extra day of work per week (6.5 hours) from 12.6 per cent in 2003.
•Companies with high rates of overtime also reported high absenteeism (17 per cent absenteeism versus nine per cent for those with low overtime.) Overall, absenteeism increased from an average of 5.8 per cent in 2003 to 12.4 per cent in 2004, an indication of the dissatisfaction, stress and fatigue that overworked employees feel.
•High overtime rates were also found to correspond with high turnover rates — 11 per cent turnover in high-overtime facilities versus eight per cent in low-overtime facilities.
•Companies with high overtime rates had more than double the workers’ compensation claim costs per employee (more than $600 US per employee) than companies with lover overtime rates (about $300 US.)
