Overtime vs. Hiring Additional Employees

Overtime vs. Hiring Additional Employees

Overtime vs. Hiring Additional Employees
Emily L. Slaugenhoup
Butler County Community College



Today’s economy is certainly struggling.   With hard times, many employers are faced with tough decisions on how to save money.   One area to be considered is the number of employees, their salaries, benefits, and bonuses.   A company can save money depending on whether they hire additional employees to cover shortages and additional work or by simply paying current employees overtime to get the work done.   There are numerous pros and cons to both.   However, there is not always a clear answer.  
According to the Fair Labor Standards Act (FLSA), an employer must pay an employee overtime pay for any amount of work over forty hours.   They do not, however, have to pay for work on “Saturdays, Sundays, holidays, or regular days of rest, unless overtime hours are worked on such days.”   Overtime pay amounts to at least one and one half times the regular rate of pay.   Weekend and night work does not require overtime or additional pay by FLSA standards, but an employer may make that agreement.   (Wages)
The cost of overtime can vary depending on the wage.   The cost of hiring an employee can vary as well, but it can also be roughly calculated.   The Huffington Post used GetHired.com to estimate the hiring costs.   It used the costs of posting an open position, reviewing applications, screening applicants, preparing for interviews, interviews, and the final steps to come to a total figure.
    Posting an open position $37.50 - $456.50
    Reviewing applications $587.50 +
    Screening applicants $100 +
    Preparing for interviews $31.25
    Interviews $75
    Final steps + $187.50
    Total (variable) $18,795.25 (higher potential cost)
This estimate would be in addition to the salary paid to come up with an overall cost for hiring an employee.   (Ciccone, 2012)
Steve Earley conducted extensive research on the overtime vs. additional personnel in the case...

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