The U.S. workforce is known for its long working hours, with employees working significantly more than their counterparts in other developed nations. On average, U.S. employees work about 70 more hours per year than those in Japan and 350 more hours than their European counterparts. This discrepancy stems from the lack of mandated vacation time and minimal restrictions on the number of hours employees can work, leading to a greater reliance on the use of overtime. 

While overtime can be beneficial in the short term for meeting operational demands, relying too heavily on it can lead to negative consequences such as employee fatigue, absenteeism, and safety risks. As a result, companies are increasingly focused on strategies to reduce overtime and create a healthier, more productive work environment.

The Impact of Overtime on the U.S. Workforce

In the U.S., the traditional workweek is typically viewed as 40 hours, but recent data from the Bureau of Labor & Statistics shows that full-time workers in non-agricultural industries average closer to 42.5 hours per week. For industries that operate extended hours or 24/7, such as healthcare, manufacturing, and transportation, overtime is often required to maintain continuous operations.

Figure 1. Hours Worked Per Week Based on Industry

However, high levels of overtime—especially when they go beyond the standard workweek—can lead to significant employee burnout and reduced productivity. While the Fair Labor Standards Act (FLSA) mandates that hourly workers be paid a premium for working more than 40 hours in a week, salaried employees are not guaranteed the same compensation, which can exacerbate the problem of unpaid overtime.

Figure 2: Weekly Scheduled vs Actual Hours Worked per Shift Worker

The Need to Reduce Overtime: Why It Matters

1 - Employee Fatigue and Health Risks

One of the most critical reasons to reduce overtime is to prevent employee fatigue. Excessive overtime, particularly in safety-sensitive industries like manufacturing and healthcare, can lead to mistakes, accidents, and even fatalities. Fatigued employees are more prone to errors and slower reaction times, which pose significant risks to themselves and their coworkers.

Furthermore, studies have shown that long work hours can contribute to a range of health issues, including cardiovascular disease, mental health problems, and weakened immune function. Reducing overtime helps mitigate these risks and promotes a healthier, more resilient workforce.

2 - Absenteeism and Turnover

Companies that rely heavily on overtime often face higher rates of absenteeism. According to research from CIRCADIAN, operations with insufficient staffing levels experience more absenteeism, which in turn leads to increased overtime for the remaining employees. This creates a vicious cycle that can cause long-term burnout and higher turnover rates. By focusing on strategies to reduce overtime, companies can lower absenteeism and retain their employees longer.

Figure 3: Absenteeism Rates of Operations based on Staffing Levels

3 - Safety Concerns

Fatigue-induced accidents are a significant concern in high-overtime industries. Employees working extended hours are at a higher risk of making critical errors, especially in safety-sensitive industries. For example, the transportation industry mandates limits on hours worked due to the known risks of fatigue. By reducing overtime, businesses can lower the likelihood of costly accidents and improve overall workplace safety.

4 - Costs and Legal Liability

From healthcare costs to absenteeism, high levels of overtime can quickly become expensive for companies. Additionally, if employees are working extended hours without sufficient breaks, this can expose the company to legal liability, especially in cases of safety violations. Reducing overtime ensures compliance with labor laws and reduces potential legal risks.

Strategies to Reduce Overtime in Your Operation

Reducing overtime requires a strategic approach, focusing on staffing, scheduling, and operational efficiency. Here are some effective methods to help you reduce overtime and create a more balanced work environment:

1 - Improve Staffing Levels

One of the primary causes of excessive overtime is understaffing. Companies often schedule "just enough" employees to meet operational demands, but this approach leaves no room for unexpected absences or surges in workload. Conducting a workforce analysis to determine optimal staffing levels can help reduce overtime by ensuring you have the appropriate number of employees available at all times.

2 - Optimize Shift Schedules

Efficient scheduling is crucial to reducing overtime. Many companies find that by optimizing shift schedules, they can better distribute workloads and minimize the need for extended hours. Consider implementing flexible schedules, rotating shifts, or staggered start times to ensure a balanced distribution of work. Additionally, companies can benefit from shift schedule optimization tools to align staffing with demand.

3 - Cross-Training Employees

Cross-training employees allows businesses to shift workloads more efficiently and reduces the reliance on overtime when key workers are unavailable. By equipping employees with the skills to perform multiple roles, companies can distribute work more evenly and cover absences without overburdening individual workers.

4 - Monitor and Track Overtime Trends

Tracking overtime hours can reveal patterns that contribute to its overuse. Use data analytics to identify which departments or teams are incurring the most overtime and determine if operational changes can reduce the burden. This will help pinpoint where adjustments in staffing or processes are needed to reduce overtime effectively.

5 - Incorporate Technology and Automation

Investing in automation and technology can streamline repetitive or labor-intensive tasks, reducing the need for human workers to work overtime.In addition, using scheduling software can help managers avoid overstaffing or understaffing by automatically adjusting schedules based on operational needs.

The Disproportionate Distribution of Overtime

Another challenge when addressing overtime is its oftentimes uneven distribution among employees. Circadian research shows that in many industries, 20% of employees work over 60% of the overtime hours. This concentration of work increases fatigue, safety risks, and absenteeism among a small group of workers, while others remain underutilized.

Figure 4. Actual distribution of overtime at an extended-hours facility.

Addressing this imbalance by more evenly distributing overtime among all employees can reduce the risk of fatigue-related incidents and improve overall job satisfaction.

Conclusion: A Balanced Approach to Reduce Overtime

Reducing overtime is essential to creating a healthier, more productive workforce. Companies that focus on better staffing, scheduling, and work distribution will see a reduction in employee fatigue, absenteeism, and safety risks. While overtime can be necessary at times, reducing its frequency and intensity ensures that employees remain engaged and effective over the long term.

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