OVERTIME

Overtime is costly to the dealership in wages, taxes and benefits. Rarely is it necessary for a properly staffed office to work overtime. However, there maybe times when it is necessary for an employee to stay beyond their quitting time to accommodate a customer. In those cases the overtime can be negated by having the employee adjust their starting or quitting time the next day. Having the employee start later or leave earlier the next day will eliminate the overtime.

An employee that is paid $12.00 per hour and works one hour overtime a week will add about $1,000 expense annually; two employees would add about $2,000, etc.

There is an exception when overtime can be cost justified. If business has steadily increased over a period of time and the additional workload is becoming cumbersome, it may be less expensive to pay overtime in lieu of hiring an additional employee. An analysis of paying overtime versus hiring additional staff should be done to determine what is more cost effective. Usually a few overtime hours is more cost effective than hiring additional staff.