Managing working time: Long hours and overtime

Section three of the Personnel Today Management Resources one stop guide to managing working time. Other sections.

Use this document to

Gain an understanding of the context for long hours

Understand the trend for increased overtime in today's organisations

Understand the reasons why long-hours working becomes prevalent in organisations

The long-hours culture remains firmly entrenched in the UK compared to many of our counterparts in Western Europe, with more people feeling compelled to work longer hours than before.

Of the pre-accession countries in the European Union, the UK is up there with Ireland and Portugal as working the longest hours, according to a report in April by the Work Foundation. In Living to Work, published by the Chartered Institute of Personnel and Development (CIPD) in 2003, the number of people working more than 48 hours a week in the UK has more than doubled since 1998, from 10% to 26%. And just under a third of respondents to a separate CIPD survey published in 2004 on the Working Time Regulations (Working Time Regulations: Calling time on working time?) say there was an element of compulsion, up from 11% in 1998. Almost half of respondents believe their employer encourages the working of long hours.

The Department of Trade and Industry's Work-Life Balance Campaign in 2002, indicated the number of people working more than 60 hours a week was shooting up, leaping by a third between 2000 and 2002 to one in six of all workers. The Work Foundation's report Still at Work? An empirical test of competing theories of the long-hours culture by chief economist Marc Cowling and researcher Natalie Turner, finds that the UK now has the second highest proportion of men working more than 60 hours per week in the EU, with Ireland the first.

The pattern of working in excess of a 60-hour week is prevalent throughout the EU - Portugal lies just behind the UK and Ireland in the table - with only Belgium and The Netherlands showing a less than average number of workers working more than 60 hours each week, finds the Work Foundation's report which surveyed more than 21,000 workers across the 15 EU countries in 2000.

Paying the price of the long-hours culture

The long-hours culture is taking its toll in many areas including health, with 10% of workers putting in 48-hour-plus weeks having suffered some form of physical problem as a result, and 17% having suffered mental health problems, according to respondents to the CIPD's Working Time Regulations: Calling time on working time? survey published in May 2004. In addition, 22% report making mistakes at work and 36% say they have performed less efficiently because of tiredness.

The increased likelihood of accidents at work occurring due to fatigue and lack of concentration has been recognised by the controls in the Working Time Regulations relating to hazardous work, night work and also in Drivers Hours legislation which has been in place many years (see Section 2 ).

Almost 70% of those working more than 48 hours a week say they regret missing out on leisure and hobby time, while strain on a relationship with a partner was a key concern for 47% of respondents to the CIPD survey.

In terms of short-term sickness, there are often examples of overtime being worked on Saturday and Sunday at premium rates and employees going sick on Monday. This can be because having earned significantly more for their overtime efforts, the normal rate looks less attractive, but it can also be because of genuine tiredness due to having worked six or seven consecutive days.

Short-term sickness can cause shortfalls in operational targets or reductions in service levels if cover cannot be found at short notice. Alternatively, a cost is incurred by having to pay a premium rate to obtain the necessary cover. Where annual hours (AH) schemes have been successfully implemented with a notable move away from overtime usage, it is not unusual to find a significant - up to 50% - decrease in short-term sickness.

Abuse of overtime can lead to low productivity as the lower the productivity, the more overtime work becomes available. Where overtime has been removed altogether such as at ICI in the early 1990s , it is not unusual to find significant increments in productivity levels just by virtue of improved morale, motivation and team ethic providing more positive motivational force than an overtime culture.

Accidents caused by tiredness, lack of concentration and haste all affect the quality of output and increase wastage and rework. Quality can also be affected in service environments where fatigue and stress is manifested with slower or poorer service provided or even the demeanour of staff members towards customers.

But it is apparently not all bad. Respondents to the CIPD survey came up with some positive aspects to working long hours such as better standard of living (51%), better quality of life (46%), improved self-esteem (38%) and promotion (24%). The most popular reason for working excessive hours is the amount of work that needs to be done, according to 63% of respondents. The majority of those working 48 or more hours a week are putting the extra hours in consistently throughout the year, with almost three-quarters (73%) doing so most weeks or every week, according to the CIPD survey.

The global picture

Apart from the US, the UK is one of the few countries in the world that condones very long working hours. Contractual hours are generally much lower in Scandinavia, Germany, Italy, Spain and France. These countries are more likely to comply with the key elements of the EU Working Time Directive since they do not have an opt-out clause like the UK. They are less dependent on overtime than the UK and they have much higher holiday entitlements. Although there is a desire for more labour market flexibility in Eastern Europe to boost its ability to compete, there are tight controls in many of the new EU accession states, such as Poland, on the number of hours that can be worked by industrial employees and on if and when they can be asked for by the employer.

Since 2001, France has experimented with a maximum 35-hour week as a means of reducing unemployment. But in March 2005, the French Government passed a law allowing up to 13 hours overtime to be worked. This satisfies the 48-hour per week Working Time Directive maximum.

The brainchild of socialist prime minister Lionel Jospin, the French 35-hour week has been criticised by many employers as unnecessarily restrictive. With the latest reform, the current conservative French government has finally bowed to pressure to provide greater working time flexibility.

In Germany, trade unions remain powerful and have succeeded in negotiating 35-hour weeks in many industries. But the need to ward off competition has led to recent agreements between employers such as Siemens and Volkswagen and the main industrial union IG Metall to increase working time up to 39 hours, for no extra pay, in an attempt to sustain manufacturing presence in Germany rather than allow operations to be moved to Eastern Europe or further afield. Employers such as car manufacturer Audi are also following suit.

The situation across the Atlantic in the US is very different. In Willing Slaves - how the overwork culture is ruining our lives, Madeleine Bunting, author and journalist for the Guardian newspaper in the UK, points out that the average hours for full-time workers in the US have increased in recent years (1977 to 1997) by 3.5 hours to average 47.1. US workers also take the shortest holidays, with an average of 10 days per year compared to 30 in Germany and 25 in the UK.

Bunting says there is a similar pattern in Australia and New Zealand with the overwork culture deeply entrenched. Australia has the second-longest average working hours for full-time employees in those covered by the Organisation for Economic Co-operation and Development (OECD). The number of male employees working more than 11 hours a day jumped from one in 18 to one in eight between 1974 and 1997, according to Australian government figures quoted in Willing Slaves.

Long hours among white collar, particularly management, employees in the US are often worked because of a macho culture which puts the emphasis heavily on results, the trend of so-called presenteeism (where staff are present in the workplace, but unproductive) and employee perception of the need to be seen to put in 'more'. We are perhaps seeing the beginning of an end to this with organisations such as Microsoft now encouraging senior staff and managers to complete their work in normal hours and adopting more family-friendly policies.

The British work 8.7 hours a day, compared to the Germans' eight and the French 7.9, according to a Centre for Economics and Business Research (CEBR) study in April 2002. Add to this the fact that holiday take-up is lower in the UK compared to its counterparts elsewhere in Europe - UK workers take 28 days on average a year, way behind France with 47, Italy 44 and Germany 41, according to the CEBR study. When the difference in hours per week and holidays is added up between the UK and Europe, it amounts to the British working almost eight weeks more than their European counterparts, according to calculations based on OECD figures by Bunting in Willing Slaves.

Long hours by occupation and gender

Nearly 40% of managers and senior officials and 30% of professionals were working more than 50 hours a week, according to Labour Force Survey (LFS) figures for 2002. Blue collar workers are also affected by long hours, particularly in construction, manufacturing and transport, with between a quarter and a third of plumbers, electricians, lorry drivers and security guards working more than 48 hours a week, according to the LFS, which estimates that long hours affect four million British workers, with no overtime pay for 2.4 million of these.

Among males, the highest proportion of long-hours workers across the EU tend to be found in administration, skilled manual work and sales. For females, the highest percentages are among senior administrative workers and middle managers and skilled manual workers, says the Work Foundation's report, Living to Work. One in five male administrators and skilled manual workers now work in excess of 60 hours per week.

As for sectors, hotels, catering, transport and communications are where the most male long-hours workers are found. For women, agricultural working demands most hours and only working in the hotel and catering sector comes close, finds the Work Foundation's report.

Although women do not work as long as men on the whole, women in EU countries are working longer hours generally. Marginal disutility - the point at which longer hours become less productive - is higher for women, says the report.

Men at the top and bottom income quartiles work the longest hours, whereas for women the propensity to work longer hours increases as they move through the income distribution quartiles. This suggests that the sexes are working long hours for different reasons.

The report debunks the theory holding that closely supervised workers work the longest hours, saying the opposite is true, with close supervision reducing the number of hours worked.

Why do people work long hours?

Why does this long-hours culture exist? The Work Foundation's report points out that the employment losses in the recessions of the early 1980s and 1990s contributed to an intensification of work for those still in jobs. And at the same time, we have seen a general pattern of de-layering as more and more businesses adopt new, leaner, more responsive styles of management. The report points out that this has meant more work for remaining employees and that as employees fear for their jobs, they are willing to accept longer hours as the price for keeping their jobs. Those currently in jobs can make it hard for 'outsiders' to break through barriers and once employed these newcomers can feel they have to mimic behaviour of insiders, perhaps working long hours to fit in, thus perpetuating the long-hours culture.

This social contagion as the process is called in the psychology literature, can be said to be responsible for much of the UK's long-hours culture, suggests the report, citing evidence that the existence of this culture prompts people to work long hours.

Post-recession, businesses can be reluctant to take on sufficient permanent staff to deal with new demand, preferring to offer overtime payments to existing staff. At the same time, those employees who have worked harder during the downturn, can feel their employer owes them loyalty and can feel reluctant to share benefits with new staff, suggests the report.

Ricardo Semler, author of Maverick and The Seven Day Weekend, published in 2003, advocates compensatory rest for long hours and worked weekends and argues that very often the workforce knows best which levels of manning and hours are required for an industrial process or service to be performed in a way that will bring excellent results.

This type of approach seems to be corroborated by the experience of companies such as Blue Circle Cement and Colman's of Norwich in the UK where early annual hours implementations have formed a catalyst for change and led ultimately to cultural environments where empowerment and trust are the key to business success and sustained presence of a manufacturing base for these companies in the UK. At Colman's, the hours worked and shift patterns are the domain of the workforce, while management simply sets production targets and asks the workforce what time is required to meet them.

In the UK, long-hours working falls relatively neatly into two key groups: white collar and blue collar. Professional, managerial and administrative workers autonomously decide what hours they will work and are rarely paid for additional hours. Blue collar workers, are actually paid for additional hours, and include craft, plant and machine operatives, call and contact centre staff, emergency and caring services, postal and transport workers.

The first group has control over the additional hours they work and to some degree when and where they work them. Their income does not fluctuate with the hours that they work, and these hours are more like unpaid overtime. They may perceive that their prospects or security are improved by the extra time put in, but there is not a direct connection as is experienced by the second group. In most situations this first group is also paid significantly more than their blue collar counterparts, and as they are professional and managerial workers they often benefit through bonuses or share ownership in the performance of the organisation for which they work. The IT revolution, e-mail and internet have also made it easier for these groups to do additional hours at a time that may suit them such as at home or in a hotel.

Such groups are, by and large, considered to be autonomous workers who are outside of the jurisdiction of the Working Time Directive, so there is no effective control of these groups with or without the opt-out.

Pressure to work overtime from management and dependence on overtime

Often there is an expectation from managers for employees to work overtime. This is very typical with drivers who commonly work five consecutive 10-hour days, and with other transport and logistics workers.

Management pressure to work overtime can sometimes be intense or overtime even made compulsory. Low basic rates of pay very often determine that employees have to supplement their income by additional hours. Such organisational dependence or institutionalised overtime is encouraged by low headcount policies and is exacerbated by reduced contractual hours and increased holidays.

Historically, the unions have defended traditional working time arrangements and the conditions in which high overtime and long hours are sustained. This has often been due to the perception that overtime is required by the workforce to maintain levels of earnings. Resistance to change of patterns of work is often motivated by the fact that new patterns would threaten earnings levels.

In the mid to late 1990s many examples came to light in the newly privatised rail maintenance industry where the traditional arrangement was normal working time of 08.00-16.30 Monday to Friday. This was not highly productive since possession of the railway lines was not available during these hours. Therefore, normal contractual hours had to be supplemented by enormous amounts of overtime at night and at weekends when possession became available. This particular industry had worked in this way for many years.

In the past, unions had been known to defend this type of restrictive practice to maintain earnings, but this now appearsto be changing. At national level, there is a strong defence of work-life balance policies and support for the end of the opt-out is now evident, as can be seen in the TUC publications About Time, published in February 2002 and Changing Times, published in August 2001. It is perhaps not so evident on the shop floor, however, where there is still a divide between management and workers with mutual suspicion of the motivations for change, along with the fear of lost overtime earnings for workers.

Looking at how overtime is worked within an organisation, it is often the case that 80% of overtime hours are worked by 20% of the workforce. This can give rise to a very vociferous minority who will defend their right to work overtime and the conditions that determine there will be a need for it. The individuals concerned may also expect their union representatives to defend these rights. There are numerous examples of small groups of often highly skilled technical or engineering staff who are earning three or four times their basic wage through overtime with hours often averaging between 60 and 70 per week on a consistent basis. This type of situation may also be defended by management since they know that the labour will be available and that the headcount will be kept down, and at these levels of earnings the individuals are unlikely to leave the business. This does however raise questions of corporate social responsibility - can companies defend this type of regime when working time has been so clearly placed on the health and safety agenda by the Working Time Regulations?

In other industries where there are ageing and/or predominantly female workforces, it can be very difficult to get overtime hours from some or all of the workforce. This gives rise to a different set of problems for the business in that additional labour is required, but cannot be sourced. This again leads to dependence on the few who will work additional hours, or alternatively temporary sources of peripheral labour which can give rise to quality, reliability and cost issues related to training and recruitment. This problem is often found in engineering groups where rates of pay can be higher and in skilled and semi-skilled workforces where pay has traditionally been higher such as the aerospace and printing sectors.

Some organisations have peak times at which additional hours are worked such as Christmas or summer and in education, term-time for teachers. Others have a continuous need for additional hours due to understaffing, business growth, skills shortages and demand volatility.

Alternative Strategies for reducing hours and dependance on overtime

Flexible labour supply models such as demand-based scheduling and annual hours have been highly effective in some continuous working environments - such as papermaking, chemicals, glassmaking, for example - and in seasonal working environments such as food manufacture, brewing and distilling, warehousing and logistics (see Section 5 and Section 6 ).

Also common is the core and peripheral strategy model where the full-time workforce is supplemented by peripheral sources such as part-time working, the use of employment agencies, temporary staff and contractors.

Personnel Today Management Resources one stop guide to managing working time

Section one: Why employers must tackle working time
Section two: The law and working time
Section three: Long hours and overtime
Section four: Shift patterns
Section five: Demand-led labour scheduling
Section six: Annual hours
Section seven: Flexible working time
Section eight: The changing role of IT in working time
Section nine: Implementation of working time change
Section ten: Case studies
Section eleven: Resources/jargon buster