The business case against overtime

Jan 6, 2016 /

Never mind workers — Yoshie Komuro suggests that if anyone stands to benefit from a sensible workday, it’s employers.

“The number of Japanese people who work overtime, more than 60 hours, is higher than any other country,” says Yoshie Komuro, “but the contributing value of each individual is the lowest among the industrialized countries.” Komuro (TEDxTokyo Talk: Life Balance) is the CEO of Work Life Balance Co. Ltd. in Tokyo, a consulting firm that argues the best way to improve productivity is to give workers a break. She admits it’s often a tough sell. “People worry that if we limit the working hours, it may lower productivity and diminish our will to compete,” she says. But she insists that overwork doesn’t just exhaust employees, it can also sap a company’s profits and saddle taxpayers with hidden costs — and she has the numbers to prove it.

A long workday hides many hidden costs. It’s a fallacy to assume that the longer employees work, the more they’ll produce. “Working hours and outcome do not correlate,” Komuro says. In fact, she has observed precisely the reverse relationship among some of her hardest charging clients. As employees scaled back their hours, managers were surprised to see revenue increase. “Some companies even have more revenue after cutting down their overtime hours by 30%.”

The tireless worker is a myth. “Our brain can concentrate only for 13 hours after we wake up,” says Komuro. “After that, our concentration is as bad as drunk driving.” Poor decisions and mistakes proliferate. Overworked employees spend more time in the office fixing errors that could have been avoided. “You are paying extra for the time when people tend to make more mistakes and have fewer good ideas,” says Komuro. “The more time they spend at work, the worse their results become.” 

The vicious cycle of exhaustion. Companies fall into the trap of pushing their employees to log longer and longer hours as soon as revenues slip. It’s only the beginning of a vicious cycle, Komuro warns. “No matter how much time they spend at a meeting, their lack of new ideas means the meeting won’t go anywhere. Only poor ideas come up, so the meeting drags on; they can’t go home; the products won’t sell. This vicious cycle has no end.” In the worst-case scenario, the employer begins to lay off workers, loading still heavier hours on the remainder of the workforce. “Company A keeps long working hours, laying off people in order to cut down the overhead. As a result, that imposes a burden on the people who remain in the company, and it turns out that the overtime costs more than the savings from laying off people.”

The plight of overworked employees should concern all taxpayers. The costs of overwork ripple out from the office to the home, as families struggle to find caretakers for children and aging parents. Eventually the pressure falls on taxpayers to share the burden, Komuro says. “First, because we don’t have time to care for our aging parents, we ask the government for 24-hour elder-care facilities, which puts more financial burden on the government. We ask to extend the time our kids can stay at the nursery, because we can’t leave work to pick up kids before the school closes.” The challenge of elderly care is particularly pressing in Japan, where the population is aging fast. “23% of Japan’s population are the elderly, the highest percentage in the world,” Komuro says. But her nation is only at the forefront of an international trend: “Korea by the year 2030, China by 2040, will follow us,” she says. “So they will have to transform their business style into one in which they can be more productive in a short period.”

Champion efficiency, not perseverance. “I believe Japan plays an important role in showing other Asian countries a good example of how to go through this transition, for them to overcome the same problems they will encounter in the future.” But change will only come slowly, with a cultural shift that champions efficiency rather than perseverance. “Help the people around you open their eyes to this idea,” Komuro says. “Quit working long hours and placing a financial burden on the government in order to solve our piled-up problems in Japan.” And above all, get the message out to managers. “Your subordinates’ motivation will keep falling, unless you change yourself,” she says. She speaks from personal experience. “I have been running my company without overtime for the past six years. All the best employees in my firm are actually women who work on their limited schedules.”

Illustration by iStock.