As summer projects ramp up and field hours stretch long, overtime can quietly erode your profitability. In our work with contractors across the Southeast, we’re seeing it again this year: strong backlogs, tight labor pools, and scorching weather that demands more from your team—and your budget.
But here’s the good news: with the right controls and visibility, you can manage overtime more strategically and protect your margins.
Let’s break down some practical ways to do it.
1.
Set Overtime Parameters with Visibility Tools
Overtime costs tend to sneak up, not because teams aren’t working hard, but because there’s no early warning system in place.
Use time-tracking systems that flag when employees are approaching their weekly overtime thresholds. Alerts at the superintendent level allow for timely adjustments to schedules before costs escalate.
If your ERP or time-tracking system isn’t giving you real-time labor cost visibility, it’s likely costing you margin. We’ve got a recent tech webinar and ERP article that outline the most contractor-friendly platforms you can reference.
2.
Strengthen Time Entry Controls
Manual time entry leaves too much room for error. During high-volume summer months, even small reporting inaccuracies can compound quickly.
Construction-specific tools, GPS-enabled time clocks, help ensure that recorded hours match actual site activity. This builds trust and accountability without burdening your field teams.
3.
Evaluate and Adjust Your Manpower Model
Before defaulting to overtime as a solution, evaluate whether your current manpower strategy is sustainable.
Are crews properly balanced? Could you leverage short-term or seasonal hires to distribute workload? Would shift adjustments or staggered start times help maintain productivity without incurring overtime premiums?
Sometimes, a slight reconfiguration of how and when work is performed can reduce the need for overtime altogether.
Try exploring flex schedules to improve summertime productivity and prevent burnout. Allowing certain roles to shift start times, compress workweeks, or stagger shifts can improve attendance and minimize reliance on expensive overtime hours.Â
It’s especially helpful during extreme summer conditions, when starting earlier or rotating responsibilities can help keep field teams safe, productive, and better protected from heat-related stress.
4.
Use Data to Plan
Look back at your job costing data from the previous summer seasons. Where is overtime most common and why?
Use that insight to:
- Price similar future jobs more accurately
- Adjust labor assumptions in your estimating model
- Tighten project scopes
- Improve scheduling and sequencing
Don’t just react to overtime; use data to reduce the need for it in the first place.
Overtime isn’t inherently bad. Sometimes, it’s the best or only option. But unmanaged overtime, especially during high-risk months, can quietly chip away at your gross profit if you’re not actively monitoring it.
Margins don’t erode overnight. They erode over 40, 50, and 60 hours a week.
If you’re unsure whether your overtime costs are within reason, or if your job costing model is accurate, reach out. We’ll help you break down the performance metrics that matter so that you can push through your busiest season.
