Is Overtime Worth It?

Donald E. Smith, CCS

March 2006

In the course of discussing scheduling and working overtime to get the job completed on schedule, one of our project managers stated that he thought that just working one additional eight hour in the week caused a loss of production on the following Monday. Can you shed any light on this?

My search turned up several studies on the subject of overtime and productivity in construction. One was conducted by the Business Roundtable in 1974, and revised in 1980. This study appears to be the basis for this subject and is referenced in studies conducted by other groups. While not directly related to your question, the BRT finds that "where a work schedule of 60 or more hours per week is continued longer than about two months, the cumulative effect of decreased productivity will cause a delay in the completion date beyond that which could have been realized with the same crew size on a 40-hour week.”

A presentation at a meeting of the Canadian Construction Association in March 2005 titled "Measuring Productivity in the Construction Industry” included a graph produced by the US Army Corps of Engineers dated 1979 showing the effects of overtime and covered work schedules ranging from 5- to 9-hour days to the extreme of 7 to 10 hour per days. Depending on the work schedule, decreased productivity occurs after the first week and continues to degrade over a period of four weeks, which echoes the findings of the BRT study. The specific schedule you described, 6- to 8-hour days, indicates a decrease of approximately 3 percent of productivity. This presentation also indicates that there are other factors that affect productivity and in general do not occur in isolation. They are as follows: overtime, changes, crowding, trade Stacking, weather and site access.

The National Electrical Contractors Association revamped earlier studies addressing adverse working conditions for electrical construction workers. One of the studies dealt with overtime and productivity. The article from their Association News (June 2004) does not go into detail about productivity losses, but it does provide guidelines to assist in recognizing the problems associated with scheduled overtime. The study does explain how to use the data to estimate the impact of overtime on construction contracts. They also point out that while the studies focus on electrical construction, the studies are applicable and useful to the entire construction industry.

The Associated General Contractors of America, the American Subcontractors Association and Associated Specialty Contractors as part of "Guidelines for a Successful Construction Project, 2003” includes a section "D.3.i, Guideline on Overtime, Construction Costs and Productivity” under Productivity Impacts. They reach the same conclusion as the BRT study that the same work could have been accomplished using a 40 hour work week. Several other items that go hand in hand with overtime are these: work pace inertia, absenteeism, accidents, fatigue, morale and attitude, turnover, job shopping by workers, supervision problems, stacking of trades and pressure for more overtime.

Depending on other factors involved, I think that the premium paid for overtime is in fact dollars lost from profit, and that can directly affect the successful outcome of the project.

About the Author
Donald E. Smith, CCS, is AWCI’s director of technical services.