Overtime hours certainly can contribute to a company’s bottom line and help get those special projects completed. But those long workweeks are very likely taking a heavy toll on you and your staff—and your families—and may not be so beneficial after all, according to industry studies.
In January, two think tanks, Washington, D.C.-based Economic Policy Institute (EPI) and Pennsylvania-based Keystone Research Center, issued “Time After Time: Mandatory Overtime in the U.S. Economy,” a position paper on overtime policy. The paper calls for Pennsylvania state legislators to give employees a legal right to refuse overtime after having worked a certain number of hours—without fear of job loss or other sanctions.
Historically, the technology industry has fought hard against efforts to legislate overtime practices, arguing that restricting overtime would slow innovation and cost the industry millions in terms of product release and development efforts.
But IT leaders would be well advised to consider the negative impacts of 50-plus-hour workweeks, as the direct result could be staffing woes. And what’s wrong with examining ways to get the work done without requiring overtime, when doing so could improve morale and retention in the process?
In this article, I'll discuss current overtime regulations and corporate practices, and I'll provide some tips on how you can combat the negative effects of overtime on the IT staff.
Current overtime laws
Presently, federal and state laws limiting overtime don’t apply to most tech workers. The distinction comes down to semantic twists regarding employee classifications of “exempt” and “nonexempt” to overtime regulations. While definitions vary nationwide, most states recognize exempt employees as those in management or supervisory positions.
California is the lone state that caps the length of a workweek, said Ethan Winning, an HR consultant based in Walnut Creek, CA. Under California law, all nonexempt employees are barred from working more than 72 hours a week.
Nationally, the Fair Labor Standards Act of 1938 requires that nonexempt payroll employees receive time-and-a-half pay if they work more than 40 hours. But most technology professionals don’t benefit, as Section 13[a] specifically excludes systems analysts, programmers, engineers, and other “similarly skilled workers.” (For specific criteria on which employees are exempt, see Winning’s article "Determining Who Is Nonexempt and Exempt.")
How many hours does the technical staff work?
There is a dearth of data about IT workers’ schedules, according to Lonnie Golden, an associate professor of Economics at Penn State University and coauthor of the EPI/Keystone policy paper. Yet, as tech workers have incredibly variable workweeks, specific and accurate data is hard to quantify.
Golden said technology workers likely work more overtime than the general average U.S. worker. Using analysis from the 2000 Bureau of Labor Statistics, he estimates that the average U.S. technology worker puts in nearly 52 hours a week—and that’s just a baseline.
During particularly busy periods, employees at Houston-based enterprise application specialist ZettaWorks can easily log up to 55 hours a week, said CEO Ken Neusaenger, who estimates that employees work 40-plus weeks nine months out of the year.
“Forty hours is a really short week, regardless of the profession you are in,” said Neusaenger. “Beyond 50 [hours], it does begin to wear on employees for extended periods of time,” he acknowledged.
The impact of OT on workers
Most corporate leaders realize that extended overtime does take a toll. Academic research cited in the “Time After Time” policy paper provides further evidence.
Quoting a 1999 survey by the Institute for Workplace Studies, the paper notes that when people work more than 50 hours a week, family conflicts jump dramatically. The paper cites research that correlates excessive overtime to increased risks for accidents and injuries on and off the job, as well as diminished quality of goods and services. It also states that overtime impairs an employee's attention span and his or her performance in executive functions.
Overtime does physical damage as well. Work-related stress can raise blood pressure and increase the risk of cardiovascular disease. It’s no small matter if you consider that job stress costs the insurance business $150 billion per year in absenteeism, health insurance premiums, diminished productivity, compensation claims, and direct medical costs.
Ignoring the negative effects doesn’t help anyone, especially management, say experts, as workers often just quit to get away from the overtime situation. That’s exactly what Jon Boroshok of Westford, MA, decided to do. Boroshok resigned his position as a senior marketing communications manager for a speech-recognition software company to start his own business, TechMarcom, Inc., in 1999.
“I went out on my own because of the crazy hours involved,” said Boroshok, explaining that now, as owner of his own business, he has much more control and flexibility over his work hours.
Compensate employees for the negative effects of overtime
CIOs and managers can, however, take a variety of measures that not only safeguard employees’ well-being but that can also help reduce turnover and poor morale by creating a balanced workweek. We'll give you a few ideas in the following sections.
At ZettaWorks, consultants that work overtime on a billable project earn bonuses based on their extra work, explained Neusaenger.
Another approach is to provide spot bonuses and gift certificates to employees who work extra hours. At a San Antonio financial services company, support and tech managers issue $50 gift certificates to employees when unplanned overtime is needed.
Set OT expectations up front
Penn State’s Golden recommends that employers establish expectations with new workers at the outset. “Even if they say up front that the job is 70 hours, I think that would be better information for an employee and they’d be better prepared,” said Golden.
Neusaenger agreed. ”Setting expectations before an employee begins working for our firm is probably the single most important factor in avoiding unhappy employees due to travel and extensive overtime work.“
Set a maximum number of hours required and respond when hours rise
Because of the economic downturn, some companies now mandate that employees work four extra hours per week. At one insurance firm, if a tech employee starts to hit 48 hours a week regularly, management pulls extra manpower help from other areas of IT to more evenly distribute the workload.
Institute comp time or banked time programs
Comp time programs also provide additional work-life balance and flexibility. Yet tracking these programs can be an administrative burden. Comp time is likely easier to implement in small technology departments, said one IT director from a medical call center in Southern California, whose four-person staff is on call all year. “I try to remain extremely flexible in responding to requests for time off and grant liberal use of comp hours when appropriate and when business needs permit,” he related.
Support family life needs
ZettaWorks allows some consultants working on extended projects to have their families travel with them to client cities. Additionally, they try to house consultants in corporate apartments rather than hotels.
Create a reduced-hour worker
Companies, or even inside tech organizations, could create a new category of knowledge worker—what Golden calls “regular full-time” employees. These employees would be limited to a 40-hour week, and related compensation would reflect the revised status.
Time to open the discussion
Regardless of which overtime approach or strategy you decide to take, it’s a great time to revisit how overtime is used in the technology department and what better alternatives are possible, said Golden.
“Overtime has been kind of the elephant in the room…everyone sees it, but no one wants to do anything about it,” he said. “If we’re truly concerned about family time, study time, and quality-of-life issues, we need to have a serious discussion about the maximum number of hours that employees work.”