Utilization of Overtime vs. Hiring Additional Personnel
Seasonal businesses are among the employers that require their employees to work many more hours than they typically would. Although requiring overtime might seem like the easiest approach, it has its disadvantages. On the other hand, hiring additional staff can be problematic as well. Deciding a course of action on a case-by-case basis is the solution, particularly for small businesses whose practices can be quickly and rather easily modified. There are both tangible and intangible costs for either choice.
When business demand requires additional work, it's wise to consider offering overtime to current employees instead of hiring additional staff. Hiring additional staff requires recruiting activities that can be most costly than having the current workforce take on more work. The cost to post job vacancies, conduct interviews, pay for background checks and drug screens, produce employee on-boarding materials and train new workers can be exorbitant and far more expensive than paying non-exempt workers 1-1/2 times their regular hourly rate for overtime work.
Using the current workforce to meet business demand ensures your staff has the necessary expertise to perform the job duties. New staff requires training and ramp-up time, which can delay workers' attention to their duties and distract current employees' attention from their job duties as well. Despite the best skills training, new staff usually can't match the efficiency and effectiveness that seasoned workers have, even in routine jobs. In addition, new employees also can slow down your current employees, who may have to suspend their daily activities to help new employees learn new processes and become adjusted to the work environment.
Some employees might welcome the opportunity to make more money, particularly if there's seasonal work that requires overtime hours. For example, the holiday season for retailers often demands that employers increase their staffing and ask employees to work overtime. Whenever possible, recruiting volunteers for overtime hours is the most effective way to get employees who are serious about working overtime hours to put more cash in their pockets. Another factor to consider regarding pay is the number of employees who currently earn high wages -- their overtime rates will far exceed the lower starting hourly wages for new employees. However, if new employees have limited skill sets or have significant time to reach maximum proficiency, it might be worth the expense to compensate the high wage-earner for time and a half.
If your current staff is already overworked or your company has mandatory overtime requirements, it may serve you well to hire additional staff. This not only relieves the burden you can put on your employees who are currently working more hours than normal -- it relieves the company from potential backlash from demanding too much from workers. While some employees want to work overtime, others may feel their employer is asking too much of them and robbing them of work-life balance. These are consequences of requiring employees to work overtime that can cause employee morale to plummet or overall job dissatisfaction based on your demands.