Most organizations cannot eliminate ALL of the overtime without sacrificing production or service levels. There are three situations in which overtime is going to be necessary: (1) the work volume temporarily increases, (2) a position is vacant, or (3) someone is absent (vacation, illness, training, etc.). I refer to this as overtime incurred outside the normal work schedule.
Sometimes it's possible to reduce overtime by swapping where it occurs. If you increase the overtime within the regular work schedule (e.g., by increasing the average hours of work from 40 to 42 per week), it may be possible to reduce the need for overtime outside the schedule. In some cases, the total overtime will be reduced.
I know, you're going to argue that overtime should be given to those employees who want it the most and volunteer for it. That's fine - up to a point. But when the overtime becomes excessive or when it continues so long that employees become addicted to it, then it's a problem. Or when you run out of volunteers and have to rely on mandatory, forced overtime to achieve or maintain the desired coverage levels - that's not good.
Here are two examples that illustrate the benefits of increasing overtime in the schedule to reduce overtime that occurs outside the schedule.
Example #1
A police department needs two people working at all times on a 24/7 basis. They are using 9 officers with an 8-hour rotating shift schedule because they don't want any overtime in the schedule. The problem is, like most law enforcement agencies, they have a high absence rate which causes their overtime to bust the budget.
If they built a small amount of overtime into the schedule, they could free up enough capacity to have a full week of relief coverage. They would need a 9-week schedule in which 8 weeks were devoted to the required coverage and 1 week was devoted to relief coverage. All 9 employees would share the relief responsibility equally. With rotating shifts, this relief coverage could be used to cover absences on any shift. It doesn't mean the relief employee would work all week; it simply means they are on-call for that week. If someone was scheduled for vacation, the relief person would work the vacationer's schedule that week and nothing more. If no one took vacation, the relief person could work a Mon-Fri day shift or go to training or work on a special project.
So the tradeoff is 2 hours of overtime for all 9 employees every week (18 hours of total overtime) in exchange for the flexibility to cover 40 to 48 hours of absences a week. Granted, someone won't be on vacation every week, but isn't it compelling to use 18 hours of OT in the schedule to avoid an average of 42 hours of OT outside the schedule? And think of the time saved trying to find volunteers to cover any absences, or the aggravation of forcing a junior employee to do a couple of double shifts when no one else volunteers.
Example #2
This example comes from a company that I designed schedules for earlier this week. They have 8 employees and need 2-person coverage at all times on a 24/7 basis. This would be simple if the 8 employees worked an average of 42 hours a week. The problem was that upper management would not approve a schedule with overtime in it. So I created three schedule options using a combination of 12-hour and 4-hour shifts. The 8 employees will have to work three 12-hour shifts and one 4-hour shift or 40 hours every week.
Although the schedules had no overtime in them, there were two 8 hour periods with only 1-person coverage instead of the desired 2-person coverage. The good news is that the organization had three supervisors to fill these open slots. The bad news is that the supervisors already had a tough time trying to be available on a 24/7 basis. When you added the two extra shifts plus relief coverage for all the other absences including their own, the supervisors were working way too many hours a week and were burned out.
I recommended that the client hire one more employee and have the 9 employees work a 12-hour schedule that averaged 42 hours a week. This would have allowed them to build a full week of relief coverage into the schedule. There would be no coverage gaps and a lot less need for OT to cover absences. I was unable to convince them that was the best solution. And believe me, I gave it my best shot. I'll probably hear from them again when the supervisors start bailing out for more attractive work environments with other employers. It's too bad that management's desire to avoid overtime in the employee's schedule is ruining the job for the supervisors. Replacing those supervisors is going to be a lot more expensive and painful.