Recognized as an effective way to remove overtime and increase flexible working time, annualized hours is a system that has been adopted by many industries as an alternative to the more traditional, rigid systems where employees are paid “hourly” or “weekly”. Very simply, annualized hours mean that an employee’s hours are looked at and totalled over a year, rather than a week. Typically annualized hours are based on a 35-40 hour week. For example, a person working a 39-hour week, with annual leave of 5 weeks and 1.8 weeks public holidays equals 45.38 working weeks.
Annual Hours = 45.38 weeks x 39 hours per week = 1,770 hours
Advantages of annualized hours include:
- Increased flexibility to cope with seasonal demands.
- Greater cost effectiveness due to the reduction/elimination of overtime.
- Rapid deployments in times of demand as decisions can be made at local level.
- Improved productivity, greater customer satisfaction and improved profits.
- Reduction in the number of temporary staff (an expensive way of supplementing manpower) and the associated training and costs.
- Higher lever of regular and stable pay for employees.
- Greater security for staff as the threat of lay-offs, due to business fluctuations, is reduced.
- Opportunity for employees to balance work with commitments outside of work.
- Most importantly – Steady income for the employee and fixed cost for the business.
Contact us for further information about how Softworks could assist you to introduce and manage Annualized hours.