How to avoid unpaid overtime and its fallout

Australian full-time employees work approximately $71.2 billion worth of unpaid hours combined each year, according to research by HR and recruitment firm, Randstad (1). While much of this unpaid overtime may occur by accident, a long-term dynamic of employees working beyond their contracted hours can lead to dissatisfaction and lower productivity. However, there are ways organisations can avoid these scenarios.

Randstad’s findings suggest that full-time employees in Australia work an average of 4.25 hours per week more than the contracted 38 hours they are supposed to work. Part-time employees work an average of 25 hours per week, one hour more than the average number of contracted hours for part-time workers. This equates to an estimated $3.2 billion, according to Randstad.

Leslie Tarnacki, vice president, human resources and general manager, WFS: A WorkForce Software Company (WFS Australia) said, “What these findings from Randstad tell us is that it is a very common thing in Australia for people to work more than they should. Whether this is deliberate or by accident, unpaid overtime needs to be carefully monitored, but for many companies this is not the case.

“Work-life balance is important to Australians, and it is generally regarded as a positive and attractive trait within an organisation. If work-life balance is not respected by organisations, employees are more likely to leave.”

Organisations should implement processes and systems to ensure work hours are properly monitored and managed. Only then will unpaid hours be recognised and kept to a minimum. Automated workforce management platforms can give companies the ability to keep an eye on employees who may be working more than they should. These platforms work in a number of ways to reduce instances of unpaid overtime:

1. Reduce manual processes

Automated workforce systems provides a clear, documented channel for monitoring hours worked. Most importantly, they also reduce the potential for human error.

2. Greater accuracy

The chances of error are reduced with an automated system, preventing instances where employees are paid for a certain number of hours, even if these have been exceeded.

3. Reduced labour costs

With automation comes greater transparency in how employees are working, and how effectively they are working. Recusing unpaid overtime can actually lead to greater efficiency.

4. Improved employee satisfaction

When employees have clear communication channels to immediately raise issues around overtime, it is easier for the company to recognise it and pay the employee accordingly. Employees are therefore more likely to feel respected and well-cared for, reducing the likelihood of dissatisfaction.