The Effect of Overtime on Employee Attrition and Performance

Citation: Housman M. The Effect of Overtime on Employee Attrition and Performance, San Francisco, CA: Evolv, Inc., 2014.

Abstract: Overtime can powerfully impact an employee’s experience on the job. On the one hand, overtime might keep employees engaged by providing them with an opportunity to take home some additional pay and make a bigger contribution on the job. On the other hand, there is literature that suggests too much overtime may burn employees out, which could have a deleterious impact on how long they stay and how they perform. Since the direction of the effect is unclear, we sought to answer the question: what is the impact of overtime on employee attrition and performance?

We found that overtime can be positive in that it allows employees the opportunity to make extra money and to make their mark on their workplaces, but it can also be negative in that too much overtime can lead to employee burnout. Our multivariate analysis based on data from 60,000 frontline service employees found the “sweet spot” in the middle. Between 1 and 3 hours of overtime per week is optimal for employee retention; more or less than that resulted in shorter employee tenure.