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Overtime or New Hires?

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During the busy heating season, your company’s resources (including staff) are often stretched to the limit. What’s the best approach to dealing with this type of situation? There are three major approaches: hiring seasonal staff, signing on outside contractors or assigning overtime to your company’s present crew. Each strategy has both pros and cons. The ultimate choice depends on the specific circumstances of your company and its employees.

Assigning Overtime

Especially during the holiday season, assigning overtime duties can be a tricky proposition. Some employees welcome the extra hours as an opportunity to fatten their pay envelopes to finance gifts and family get-togethers, while others will resent the time taken away from being with family members and friends.

If your crew is already super busy, assigning overtime hours may be neither practical nor advisable. Doing so increases the hazard of burning out your crew and fostering resentment, and ultimately turnover as overburdened workers seek employment elsewhere. There is also a real risk of injury or critical errors due to fatigue, which could ultimately be more costly than the expense associated with hiring additional personnel. Think replacement of costly equipment, workman’s compensation claims or adverse legal action taken by angry clients.

On the other hand, if your crew is truly amenable to taking on overtime hours and is not overburdened already, assigning overtime hours can be a smart strategy for handling a short term upswing in business. assigning overtime hours is often less expensive than hiring temporary or seasonal staff, not least because people already on board within the company are trained and up to speed on your company’s policies and working with its equipment.

If you decide to go with assigning overtime hours, consider making voluntary requests rather than mandatory demands. If you must assign mandatory overtime hours, avoid shifting the bulk of the demand onto newer workers with less seniority or those without family obligations. And if a temporary busy period stretches into a prolonged upturn in business, you should reconsider the possibility of taking on more staff rather than continuing to rely on overtime.

Hiring Seasonal Staff

If your crew is truly stretched to its limits, you may have no choice but to take on additional personnel, at least temporarily. In such cases, you will have to deal with the upfront expenses associated with advertising for and interviewing prospective candidates, as well as the loss of productivity associated with the learning curve for new hires. In addition, depending on how many hours seasonal staff work and how long they stay on the payroll, your company may be on the hook for unemployment benefits once seasonal staff are let go.

However, people hired for seasonal positions are often more flexible and amenable concerning work hours than regular employees are. In addition, seasonal workers understand that their term of employment is limited, so you as a business owner or manager are spared the anguish associated with laying off a long-term employee once the busy season slows down.

Signing on Outside Contractors

In many respects, signing on outside contractors to handle busy periods represents the best of all possible options. Like temporary workers, outside contractors understand that their term of employment is limited, so letting them go once their contracts expire does not involve painful issuing of pink slips or layoff notices. In addition, because contractors are not employees, your company is not responsible for making Social Security, Medicare or unemployment compensation payments on their behalf.

On the other hand, temporary contractors face similar learning curves as temporary employees. In addition, business owners must exercise care in scheduling and assigning work duties, tools and equipment to contract workers. This is because there are potentially serious legal and tax hazards associated with miscategorizing employees as outside contractors. If the IRS determines that an employee has been improperly categorized as a contractor rather than an employee, your company may be liable for making up employment related tax payments, not to mention being hit with stiff penalties.

No Single Solution

There is no single solution for dealing with seasonal upswings such as the busy heating season. The right solution for your company depends largely on its particular circumstances. Even a brief seasonal rush may demand taking on more staff if your company is already operating lean and the additional demands are heavy enough. On the other hand, assigning overtime hours may be sufficient to deal with a fairly sustained seasonal heating rush if your company’s staffing is robust and populated with technicians eager to accept overtime hours.

Disclaimer: This article provides a general discussion of various staffing options for handling busy periods such as the heating season. It is not meant to represent employment or legal advice. Please consult with an employment specialist or an attorney specializing in employment law with questions concerning your company and its staffing needs.

Audrey Henderson

Posted In: Management, Money

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