Work smarter, not harder: why overtime is damaging

Australian workplaces are feeding a culture of time theft. In fact, according to research from the Australia Institute, employees on average are working around 4.6 hours of overtime every week – unpaid. That’s around $81 billion in free work to employers, with respondents claiming they suffer from an “epidemic of overwork”.

From a top-level perspective, a few hours of overtime here and there may not seem like a big deal. On the contrary, it might appear to be a necessary evil in order for businesses to remain competitive. But when you view the issue on a granular level, you start to see how overtime is actually doing the opposite of its original intention.

The 11th annual Go Home on Time Day report shines a light on a negative overtime culture that pervades almost every industry in Australia. More than one in five (21%) full-time employees are “working more than they want to”, with those in goods-producing industries such as agriculture, mining, manufacturing, utilities, and construction reporting they work nearly 7 hours of unpaid overtime every week. And office workers aren’t immune, with education, healthcare and public administration workers clocking up more than 4.7 hours of unpaid overtime weekly.

The negative effects of working too much overtime

The cons far outweigh the pros of a business getting a few extra hours out of their staff. Short-term problems include lack of productivity, reduced work-life balance, and high staff turnover, while the long-term effects have been shown to influence physical and mental health issues. And it’s not only the individuals who are bearing the brunt of the negative effects – businesses are losing up to $300 billion every year thanks to workplace stress, with employers spending three-quarters of their staff’s salary to “cover lost productivity or to replace workers”.

Sadly, the problem doesn’t look like turning around in the immediate future – with Hays research finding overtime has increased by 31% in the past year. In 2019 alone we’ve seen a number of cases in Australia where overtime has led to severe outcomes for the employee.

From Dr Yumiko Kadota, who spent six weeks in hospital with insomnia and crashed her car after resigning from her dream job, to major law firm King & Wood Mallesons, whose staffers were sleeping in their offices overnight while working on the banking royal commission. Even Sydney law firm Gilbert + Tobin has been accused of cultivating an environment where drug use to combat overtime fatigue is necessary to “keep up with demands”.

Why do Australians work so much overtime?

The reasons an employee may do overtime vary. Some may strive to appease a manager’s high expectations, others may be looking to make extra money (despite workers globally doing 2 billion hours of unpaid overtime last year), and for many employees, their company simply lacks a proper organisational structure or necessary resources, so management puts the hard word on them to “be a team player”.

Even technology is playing a role. The Centre for Future Work’s report revealed that automation and other workplace technology cause employees to work more because they fear losing their jobs. More than half (57%) believe their employers will use new technology to reduce staff numbers, and only 18% “expect shorter working hours to be the outcome of technological change”. So for many, overtime is a natural response to their fears of being put out of a job.

But there’s a broader issue at play here – namely, how the law tackles the issue of overtime.

The Fair Work Act states the maximum weekly hours for full-time staff is 38, and employees theoretically have a right to refuse additional hours they consider as “unreasonable”. However, there is no legal definition for what constitutes “unreasonable”, which often leaves employees stuck between a rock and a hard place, concerned they may be unduly punished if they go against their workplace’s established overtime mentality.

Proof reducing overtime is good for business

The good news is that many organisations are now recognising the negative impact of overtime. In Japan – a country renowned for its intense work culture – Microsoft trialled a four-day work week that gave special paid leave to workers on their fifth day. The results of this new 32-week program were staggering, with the software giant claiming a 40% boost to productivity.

Closer to home, marketing agency Versa has implemented a no-work Wednesday policy across its offices in Sydney, Melbourne, and Singapore. The mid-week break is designed to do just that: give staff a reprieve to “go to the gym, get on top of housework, look after young children, schedule appointments, work on their startup or just watch Netflix”.

Through custom strategies designed to best support their staff, these companies are on the path to increasing productivity while creating a better work culture with more engaged employees.

Working better within boundaries: 5 tips for business leaders

Is it time your company joined the small but growing list of companies that are battling overtime and building a more positive work environment? Getting there is a marathon, not a sprint, but some helpful ways to get started include:

  1. Make goals measurableOne of the main fears of reducing work hours is that staff won’t be able to get everything done in time. This can be overcome by ensuring employees are aware of what’s expected from them. Create company and team objectives that align with individual development goals and work together to ensure KPIs are not only measurable but achievable.
  2. Communicate: Reducing pressure on staff means keeping them in the loop about the main business objectives and priorities. Schedule weekly meetings to help them set their own priorities and to ensure they have the capacity to manage their tasks within normal work hours. If they are struggling to stay afloat, support them by offering upskilling opportunities.
  3. Provide employees with adequate headspace: Employees need a healthy headspace to be productive. Encourage them to self-manage their days, blocking out time for work in their diary and holding themselves accountable for deadlines. Also don’t burden them with unnecessary things. Cut out needless and back to back meetings, implement collaboration tools to reduce email clutter, and encourage staff to reset every hour by taking five-minute breaks.
  4. Set boundaries around work creep: It’s all too easy to start strongly and then slowly take the foot off the accelerator – letting work creep back into your staff’s personal lives. Make rules around not checking work emails on personal phones, and implement ‘out of office’ procedures so only the most urgent calls and messages are addressed outside normal hours. Also, teach your staff how to unplug correctly. A LinkedIn study found 70% of professionals never fully unplug from work, and 40% “work outside of regular hours in a way that interferes with family time”.
  5. Encourage flexi-work: Flexible work is no longer a dirty term. It’s been proven to increase productivity, staff wellbeing and the company’s bottom line. So allow flexi-work schedules and work-from-home days to create a more agile culture in your business.

Overtime is ingrained in the Australian work culture, and effective change won’t happen overnight. However, by taking measures to reduce after-hours work and introduce strategies to support employees rather than abuse their time, businesses can reap the rewards of a happier, more engaged and more productive workforce.

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