Overtime and the Hourly Employee

Hours in a growing industry is always a challenge. In established industries it is simply a math problem where a certain amount of overtime equals another full time employee. In a high growth company, it is much more difficult. Employees become reliant on overtime pay for their daily expenses. A person who should only be making $2.5K a month starts bringing in $3.5k a month and their lifestyle becomes dependent on making that kind of money. However, in the end people who are putting in that kind of overtime will only want to put in that kind of time for so long. Once you realize that you have employees putting in 300+ hours a month you have to realize that these peoples lives are not "typical". Retention is also an issue over the long term. People do not want to work those kind of hours long term. While with the economy the way it is you can get away with it for a while, after a year or two employees will even take a pay cut to get a more family or lifestyle friendly schedule.

Really these type of situations should never happen. While their will be time frames of a month or so where increased hours are necessary in a production environment, if you go more than a quarter with this type of overtime you need to seriously consider adding shifts. The danger you are facing if an hourly workforce gets used to gross amounts of overtime is a complete change in the demographics of your hourly workforce. If you are looking specifically for guys who will work 200+ hours a month, they will never be happy when told that they only get to work 180. They have car payments and mortgages based on the high hours. They will leave and you will be forced to find people who have more realistic hour expectations. While you always want to hire people who will work a high amount of hours, too many of those and you create a situation where it is an entitlement. A proper mix is needed. For retention purposes you need at least a 70 percent hourly workforce that is happy to work 40 hours a week. Then you can leverage the other 30 percent to fill in the gaps. There will always be employees who will take whatever hours they can get, but creating workforce that is entirely composed of "hour whores" is a recipe for failure. In a Union environment you also get people that are on the watch for percieved seniority violations as it pertains to overtime.

Bottom line: Create a sustainable production pace and find a metric that tells you when to add people. For people in a more static and established industry you need to get with your controller and figure out what those metrics are.

Talk to a safety guy about the myriad of safety issues associated with long hours as well.

1st Step in a new Blue Collar HR job: Who to make Friends with

While I haven't had too many changes in jobs there is one truth that I am sure of in the line blue collar HR field. Make friends with your finance person. While in the white collar world with a proven structure this may seem anathema, the comptroller, controller, accountant, or whatever you call it, is an extreme asset in the management of an hourly workforce. Look, I have to many employees to be absolutely groundbreaking in everything I do. Maybe that is admitting defeat. But in my world simple victories stand out. Victories like making sure labor gets charged to the right account so that the proper supervisor or manager can be held responsible. Also, when you are looking at big picture, assessing manning levels and adjusting using overtime as a metric doesn't work when your maintenance account is getting not getting charged because of the production people they are using on overtime for fire-watch.

The person who knows all of these things is your financial guy (gal). Their frustrations are your frustrations when it comes to managing 200+ employees. Simple oversights or errors over the long term can hose you big time when you try to do that "big boy" analysis to actually better your organization. First step when you enter a new Blue Collar HR job is to ensure that labor is being charged to the right account ever time and employees are classified correctly. The easiest ally to that purpose is the finance person. They almost always feel under-appreciated and they already have a long list of issues about how labor is charged (without full perspective) that will make you look like a star.

Solve that issue and the finance guy will come to you with issues rather than suffering in silence. Which for some reason is what they tend to do without acknowledgment.

Admin Recruiting....Where it's At

While it is certainly a daunting task to have multiple admin requisitions come to me within my first few weeks at a new job, I am appreciating the challenge of building a staff from scratch so much. While I have had some experience with building the hourly ranks with solid performers and feel that I am successful at it, salaried employees have so much more complexity and fit means so much more to the organization. The human resources function feels so much more rewarding to me now that I have sole control of who to show my operation guys and can control the how applicants are recruited so much more. While I don't think I could ever become a recruiter without a master, I really enjoy building organizations from the ground up. I have always liked buying into a vision and then selling other people on the promise of an organization that I belong to. Especially when I am given a free reign to go ahead and experiment with raw talent as well as seasoned professionals. While there are a host of other aspects of the HR generalist role I enjoy, the recruiting part seems to be the lynch-pin between running a successful organization and building a successful organization that makes you feel more responsible for organizational outcomes. There seems to be so many good hires around the corner right now in this economy. It is truly exciting. Now if I can just find the time to learn how to write status reports correctly I may just make it into my second month. Google "Terrible" Terry Tate: Office Linebacker.....the horror....