The Hidden Cost of Lost Overtime: The Clock is Ticking

The phrase "time is money" never rings truer than when it comes to overtime. 

However, many employees across the United Kingdom find themselves working hours beyond their contracted times, without adequate compensation. This issue is not just about money; it's about respect, job satisfaction, and ultimately, employee retention.

So, how can businesses ensure that they are keeping accurate records of their employees' hours and compensating them fairly? With £26 billion of unpaid overtime recorded in 2023, we take a look at the numbers and hidden cost of this lost time.

The Real Cost of Overtime

For many employees, working overtime is a common occurrence. Whether it's to meet a deadline, cover for a colleague, or simply 'one of those days', many workers find themselves working later than planned. Whilst most don't mind rolling their sleeves up occasionally, it becomes a problem when overtime becomes a routine, or expected, without proper compensation. 

The public sector tends to report more instances of unpaid overtime. This can be attributed to the pressing demands of public service that often require employees to go above and beyond their standard contracted hours. However, the issue of unpaid overtime is not exclusive to the public sector; it affects various industries and organisations across the UK. In 2023, 3.8 million people in the UK worked unpaid overtime. This averaged out to just over 7 hours a week and £7,200 in lost earnings. This could make a huge difference in workers' life, especially in the current climate as 69% of us worry about our finances. This ties back to employee retention as 39% of jobseekers are motivated by a higher salary when searching for a new role.

The Adequacy of 'Adequate'

According to the UK employment law, employers are only required to keep an 'adequate' record of the hours worked by their employees. But what constitutes 'adequate' is often left open to interpretation, and this ambiguity can lead to discrepancies in overtime pay.
This is where time management systems come into play.

Valuing Employees and Promoting Retention

Using a system like TimeKeeper not only ensures accurate time tracking, but also communicates respect for the employee's time and effort. Recognising the extra time employees invest in their work helps them feel valued and appreciated, which in turn can boost morale and promote loyalty. Financial stress is one of the leading causes of burnout. In fairly compensating and rewarding overtime worked, businesses can foster a healthier work environment and improve staff retention. With TimeKeeper, there's no room for error or ambiguity; every minute is accounted for and can be identified as regular or overtime. Link this up with your Payroll system, and you have an easy, accurate way to record and pay employees for their time.

The Bottom Line

In a world where every minute counts, lost overtime is a problem that businesses can't really afford to ignore. Not only does it impact the employee's paycheck, but it also affects their job satisfaction and loyalty to the company. Another risk with unpaid overtime is whether it actually puts the employee below national minimum wage when their pay is divided over the hours worked. By implementing an overtime structure and time management system like TimeKeeper, businesses can ensure that all hours worked are accurately recorded and appropriately compensated. Because at the end of the day, a business's most valuable asset is its employees, and their time should be recognised as such.