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I work for an IT company that is primarily services (project) based rather than product based. All software engineers are salaried. The company has set new expectations that everyone should work 48 hours per week instead of 40.

Note, this isn't occasional overtime due to crunches. This is the new 40.

The reasoning is that this enables the company to provide benefits to its employees such as monetary incentives and training because the company is more profitable.

more hours worked = more billable hours = larger profit

I understand the need for profitability and the occasional crunch time and have put in the extra hours when it was needed and beneficial to the project. However, I am also very sensitive to work life balance and have raised my concerns about the the new expectation.

My employer is open to other methods to increase profitability so I hold hope that we can turn things around before it becomes a horrible place to work.

How does a services based company become more profitable without increasing the number of hours expected from it's salaried employees?

Are there any case studies showing the pros and cons of consistent overtime?

Are there any case studies for a successful service based business model (for software development companies) that does not require consistent overtime from its employees?

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And for all but the most desperate, I suspect that 0 hours will soon be the new 48 hours. –  Rein Henrichs Apr 15 '11 at 4:16
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"Are there any case studies for a successful service based business model that does not require consistent overtime from its employees?" Yes. Almost all of them. –  Rein Henrichs Apr 15 '11 at 4:24
    
I posit that this is not off topic. The FAQ lists "freelancing and business concerns" as an on topic question. This was a business concern. It specifically relates to software development businesses in that I was looking for case studies that buck the trend and have a successful business models without forcing unpaid overtime on its employees. I vote to reopen. –  Ryan Taylor Mar 25 '12 at 15:56
    
Case study for successful service (project) based software development business without constant overtime from its employees - in case if business with more than 135 million registered users in more than 200 countries and territories as of Nov '11 is considered successful (LinkedIn). –  gnat Mar 27 '12 at 18:16
    
Valve Handbook for New Employees PDF -- While people occasionally choose to push themselves to work some extra hours at times when something big is going out the door, for the most part working overtime for extended periods indicates a fundamental failure in planning or communication. Valve is a successful game company, in an industry which has in the past been guilty of excessive overtime and crunch-mode practices. –  dodgy_coder Jun 19 '12 at 5:12
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closed as off topic by Yannis Rizos Mar 7 '12 at 7:50

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3 Answers

up vote 19 down vote accepted

Sorry to tell you this but if that is the official position of your company then it is already too late. Senior management has made their position clear simply by taking this stand. They have shown themselves to be short-sighted and uninformed of basic human motivations.

Regardless of how you find to "turn it around", your top talent will be leaving within three months, followed quickly by the experienced staff. After the first few key people leave, the company will start offering incentives to keep those that remain. The incentives will work on a few people for a while, but eventually they will leave as well.

Over the course of the next two years, you will only be left with the workers who are easily bullied into working unpaid overtime. Needless to say, this isn't the group of people that you can draw leaders from. Of those that remain, they will start incorporating more of their personal lives into their daily work (they have to since they have less personal time now and things need to get done) so they will put in 48 hours, but only be productive for 38-42, if that. Did I forget to mention that efficiency studies of the IT field have shown that the performance gap between skilled/experienced workers and those less experienced can be as high as a factor of 10? Yep, that's right, those that remain will take a lot longer to get the same work done.

The overall quality of all work done by the company will fall - fast. Clients will notice it and start shifting business away to companies that can get the job done right. Managers talk to each other and word will spread quickly. Before long, the only business the company can get are projects that are radically under-bid, counting on the "free" time from the staff to make up for the low bid.

At this point, the environment at the company will be so poisoned that even the people that were bullied into staying will start leaving.

To put it another way: "Been there, done that"

Let me explain why this happens with a lesson from Capitalism 51. Company X pays $75,000 for a specific job. Company Y down the street also pays $75,000 for the same job but requires that everyone work an extra day. Which company will have to work three times as hard to hire and then keep people? Which company is more likely to be able to hire the top talent?

The fact that you are here asking this question means that you care about your job and about the company which is good. It means that you most likely fall into one of the top two groups I discussed. If your company doesn't drop this policy fast, I suggest that your plan to "turn it around" involve outbound resumes.

I'm sorry to sound so negative, but this 48 hour idea isn't exactly new.

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Wish I could give this a +10 –  Rein Henrichs Apr 15 '11 at 4:23
    
I don't mean to bash on my previous employer. There are a lot of great and talented people there but I thought it would be helpful for the community to know that this prediction is playing out almost exactly as it's written. My previous employer lost three of its top developers since February, including myself, due to this and other toxic decisions. As predicted they have all found other employers that are competitive with our previous employer but do not require a 48 hour work week. Thank you for your advice. It will continue to make a significant positive impact on me and my family's life. –  Ryan Taylor Sep 4 '11 at 22:35
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You could try this "rules of productivity" blog post. The linked PDF or PPT (both formats available) presentation was very interesting. At least some sources are cited, and it should get you started. It demonstrates that by consistently working more than 35 to 40 hours a week, most people (including programmers) will actually get less work done. There is a short period of increased productivity lasting up to 4 weeks, from which employees will then need to recover before they can return to normal productivity.

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If you can't make a profit with 40 billable hours a week, every week, with 100% utilization, 8 more hours won't fix your problems. In fact, an unsustainable rate of development will only add to them in the (not so) long term.

I would be willing to bet that your company has far bigger problems, like terrible utilization and/or suicidally low rates, and the only thing 48 hour work-weeks will create for your company is a mass talent exodus as your skilled developers leave like rats fleeing a sinking ship.

I almost want to get hired there just so I can quit in a fit of righteous indignation.

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