Overtime rates still going up in Australia

Employers told to avoid making overtime 'excessive'

Overtime rates still going up in Australia

The previous financial year has seen overtime increase in 35% of Australian organisations, prompting warnings to employers to keep overtime "reasonable" to protect employees' wellbeing.

Hays' latest survey found that 30% of employers that increased overtime did so by five hours per week on average. Another 36% increased overtime between six and 10 hours per week.

Matthew Dickason, CEO Asia Pacific at Hays, said it's clear that there has been a growing number of organisations requiring staff to work overtime in recent times.

Last year, a previous Hays survey also found that 45% of organisations saw an increase in the level of overtime.

But not everyone carrying out overtime work is adequately compensated.

According to the latest Hays survey, 31% of employers did not pay their staff for overtime work. Another 30% rewarded them non-financially, such as extending time off in lieu. Only 39% of employers said they paid staff for overtime.

'Excessive overtime'

This trend of increasing overtime may likely be due to the skills shortage, which 62% of employers said led to increased workloads for existing staff.

The situation is raising the alarm for experts who are warning employers on the dangers of overtime.

"While a reasonable level of overtime may be expected in certain roles and industries, it should never become excessive," Dickason said.

"Excessive overtime can negatively impact employees' physical and mental health and wellbeing. It can lead to stress and burnout, and adversely affect work-life balance, job satisfaction, productivity, and staff turnover."

In fact, 21% of employees in search for a new role this financial year said this is because of the negative mental health and wellbeing impacts of their current role. Another 25% of them said they are motivated by poor work-life balance.

Dickason acknowledged that perceptions on what could be considered "excessive" overtime can vary for everyone.

"As a result, overtime expectations differ between organisations," he said.

Countering overtime rates

But to prevent rising overtime rates, Hays recommended asking employees what they consider to be a reasonable level of overtime.

It also urged Australian employers to tell staff to report excessive overtime, as well as use pulse surveys to measure employee health and wellbeing.

Using tools and software to track working hours, as well as streamlining and automating process are also encouraged.

Hiring additional temporary or permanent staff can also help, as well as offering flexible work arrangements to ensure work-life balance.

"We urge employers to recognise the hidden costs of overtime and take a proactive approach to better manage it," Dickason said.

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