Three simple ways 'free overtime'​ shortchanges everyone

Best Practice Advertising founder Victor Condogeorges
By Best Practice Advertising founder Victor Condogeorges | 30 May 2019
Victor Condogeorges

I recently listened to a podcast called S-Town, from the guys that made Serial. It was very sad to see a brilliant man such as John B. McLemore have his genius undiscovered for so long. During this podcast, a short essay by John, titled "A Worthwhile Life Defined", was read aloud. In this essay, he distils how much time we actually have in an average lifetime. This motivated me to write about what I had thought about for so long.

There's a culture that exists within a salary-based service industry, where value is completely misunderstood and time is treated as a virtually infinite resource that is often expected for free. Simply put, the attention economy is one where time and attention are exchanged for profit and output; and if something can be optimised to a point of efficiency where it becomes free, then profit extraction can be greater for those who own "the pipes".

Something I recently wrote about touched, ever so lightly, on the fact that we're perpetually expected to do more with less. This is an efficiency mindset that is leading us downward, towards zero, rather than focusing on growth. One of the big components of this is the fact that more things need to be done when there is less time to make those things into reality.
This concept is often obfuscated by the falsehood that an individual's time-management is to blame. This is not entirely the case.

Yes, there is a productivity inefficiency in going for a coffee when you get into work. Or going to the kitchen or the bathroom, or experiencing that productivity decline after eating lunch. To the mechanised and less-progressive this may seem like an area that can be optimised by reducing their duration and frequency. It is to be noted, however, that, as humans, we need to do human activities. These things may seem like they can produce a greater efficiency if cut, but there is a high risk of doing greater damage to productivity after their reduction, as with Amazon's toilet blunder.

Good things come to those that work hard, but better things come to those that get others to work harder for them.

The Party of Three
I'll be discussing three parties involved in the chain that are affected by free overtime:

  1. The Clients and brands: The service-seekers who want work to be done.
  2. The Agency: The hosting facility that sells people's time for a commission.
  3. The Worker: The person who does the actual work.

The clients and brands
The Time & Expectation Vacuum
Clients & Brands are often the primary sources of work and income for agencies. Arguably, the real income originates in customers, but, in this example, the campaign investment comes from the agency's clients.

To most people, things just come up, delaying the launch. People forget, bringing more delays. I get it. What I don't get is that if there's a delay on your end, then there will be a delay on my end, too. If it takes me three days to do the work, and you get it to me three days late, that means the deadline changes, right? Well, I may be talking sense here, but the reality isn't so in media land.

In media land, if assets are delivered late, the problem of achieving the deadline on time becomes the next person's problem.

Let's think about what the expectation is and how ridiculous it would be in another context.

Imagine taking your car to a mechanic for a service
You have an appointment to get your car serviced on Monday. You forget to drop the car off until Friday. The head mechanic at the service centre tells you, "Normally, this would take a week to get done, but we will fast-track it, and get it done for you by Monday at no extra cost."

As it turns out, the service centre had some staff working overtime for free, so they've set the expectation of the time it takes to achieve a task to be three days. So, from now on, you take your car in on Fridays, and just get it done in less time. The thing is, you don't understand how much time actually went into servicing the car. To you, it is money in and services out, and all in less time. You naturally begin to ask yourself "Why did they say they needed it for a week if they could do it in three days?”
You've landed in the first problem that free overtime creates, the vacuum of understanding how long it actually takes to get things done. It would have taken the team a week to produce the things you needed; let's say 40 hours. By giving them 20 hours to deliver it, the additional 20 need to come from somewhere else. Usually, it is the life part of "work-life balance" that is sacrificed by the workers.

The agency
The Lost Commission
The agency is a portal for the marketplace and payment. It functions as the gateway between the people that want to get paid for work on brands and the brands that want people to work on getting sales from their campaigns. This is the profit machine that is continually having their margins squeezed. The agencies are just middlemen, a pipeline between brands and audiences. Every pipeline, though, is continually sought out to be less leaky (more cost-efficient) at every stage.

In this example, I'll focus on one type of agency fee structure model, the time-based structure where clients pay for a share of the resources. It might be 20% (~8hrs) of a director, 30% (~12hrs) of a manager, 60% (~24hrs) of an executive, and 40% (~16hrs) of a coordinator or assistant. Without going into too much depth of weighting the hourly rates of each of these titles, the client has essentially paid for 1.5x of an employee, or 150% (60hrs).

There are drawbacks and benefits to all fee structures, but three large problems that this structure creates are:
1) How does the team keep to their allocated time slots if things become "urgent", especially if the client has exhausted their time allocations;
2) Juniors are expected to do more senior work because it is cheaper; and
3) Agencies can make more money by overworking fully funded staff, without remunerating them accordingly.

By not funding the appropriate amount of people needed on a task, agency fees can be kept "competitive". And, as a pipeline in nature, that is exactly what anyone paying wants to see. This situation development is particularly evident with procurement. They don't want to see accurate or realistic time allocations; they just want to see short-time allocations. Short-time allocations mean low fees, and low fees mean less leakage, apparently.

When overtime is provided for free, agencies lose the commission they would have made if the hours had been charged to the clients. That commission might be enough to close the agency vacancy rate of 6-10%.

You working overtime for free is essentially costing your agency money they could use to hire more staff.

If agencies were to charge their clients the actual hours worked, the client would be put in a position where they would be forced to acknowledge what actually goes into delivering the work. More likely, though, clients would resign the agency when it comes to "efficiency cuts" because that would make the agency too much of a leaky pipe. The work would then go to another company willing to work more for less money.

That's right! By working free overtime, that work doesn't need to be funded; it just gets done regardless of the extra hours required, and the agency loses the commissions it should make on your time.

You, the worker
How much is your time worth to you?
You have a life outside of the office. Just because you get in early and leave late doesn't mean you don't have a life. That may simply mean that you feel powerless to change the endless stream of work pouring through and the backwards mindset of working more than you get paid to. Things get more complicated. Times get busier. You get more productive. And yet "staying back is your own fault", according to many focused on the commercial extraction of value from time.

Let's say you start at 8:30 in the morning, and finish at 7:30 p.m. It takes you about 45 minutes to get to work, and a little bit longer to get home after the day is done. If you were to finish at 7:30 and get home by 8:30, shower, cook, and eat, you'd probably be finished up by 9:30-10:00. Let's say that you then use these last remaining 2 hours of the day to unwind, read some emails you missed from the day, and get into bed. From a 24-hour day, your time is split like this.

victor chart

You have four hours to live.

You get about four hours of the 24 in a day to focus on yourself. Not your career, but you! Your family. Your life. Your home. Your hobbies. In an average week, you would have 20 hours on weekdays and 30 hours over the weekend—even assuming a sleep-in that would usually end at 9 am—provided that you're not working or preparing for Monday on Sunday evening. You get 50 hours a week of time for yourself, except you have to put it in the pockets to give the day’s work priority and squeeze everything else into two days. It's hard being productive for the whole week, especially when it comes to doing your own thing when all you want to do is "relax".
When you look at it this way, you might do 10 hours per day, 5 days per week. In the first 4 days of the week, you've done the time you're remunerated for, the 40 hours. If you're doing this, Friday becomes a day of free labour for your employer.
I've done the 40 hours in 4 days before, and I found that it works well. I can remain productive throughout the day this way and get a whole lot more done. 40 hours in 4 days works well because you have three days to decompress. One day to unwind, one to get your life admin done, and the other to prepare for the next week. It is the same amount of paid productivity with a long weekend every week. Weeks cease to be a blur, and weekends stop being "too short", forcing you to find something else to say every Monday.

How to get a free car every year
The other thing to consider is how the free extra time cheapens your value. Let's say you get paid $72k as an annual package. Not too far off the average wage, according to the ABS. If you were to charge your hourly rate for the additional 10 hours you work (above the 40 hours you get paid for), you could buy a brand new Mitsubishi Mirage by the end of the year, without changing anything about your lifestyle.

If you work 50 hours a week when you're paid for 40, you're short-changing yourself the cost of a new car every year.
It's not about smashed avocados here, its about free labour.

Final thoughts
While staying back is a choice, it is a choice often guided by the in-agency cultural notion of what a good, hard-working employee is supposed to do.

There is a feeling that has compelled me to stay back in the past. The magnet for staying back is a concoction of thoughts that are comprised of pride of work, personal accountability, the guilt of leaving on time when more work remains, a responsibility to the team, the fear of repercussions of not doing the work, and client relationship maintenance. The root of these is the prioritisation of career over self or family. If you feel alignment to these elements, your work ethic will most likely be exploited by those selling your time.

I've been told many times that all the overtime and hard work I've done doesn't make its way to annual reviews—only the outcomes and achievements do. Looking in the rear-view mirror now, it's fair for my past bosses to have said that; they were telling me the truth. I took it differently at the time, though, as if my hard work, invested time, and sacrificing my outside-of-work life had gone unappreciated; it seemed that all the effort I had dedicated to getting the job done was worthless to them and the business.

The free overtime culture is a chain that needs to be broken, and it is one that can only be broken with unity. If any one person is willing to keep doing free overtime and sell themselves for less than their peers are charging, the resistance is sabotaged and the chain is reformed. The "do more for less" attitude returns, and then, as workers, we get less of the profit share than we are entitled to for adding to the growth of the business.

If you're willing to work overtime for free, you are letting the only thing that matters in your life go by—time.

There is a clock with your time ticking away somewhere. Every hour you work for free reduces the amount you have for yourself.

I think there are solutions and benefits for everyone to value their time more. Four-day weeks are great, and they can deliver the same, if not more, productivity.

Maybe it is time to charge by the hour, and fix free overtime once and for all.

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