STOCK MARKET WATCH -- Wednesday, 28 March 2012

[Tansy_Gold]

4. As a former labor cost analyst with major manufacturing companies. . . .

My experience isn't all that extensive, but I can tell you this much:

Productivity in terms of dollars produced per hour actually went up slightly when overtime was offered.

Productivity went up slightly more if there had been a period of slowdown immediately preceding the overtime.

Productivity in terms of COST of goods produced per hour declined significantly with overtime.

Cost of adding personnel far outweighed the decrease in dollar productivity in the short term.

By the time the long term cost of adding personnel would have outweighed the decrease in dollar productivity, the need for overtime was past.

The guessing game involved trying to determine when to hire more people to counter the decrease in dollar productivity.

In every single company I've worked for that encountered this situation, greed actually cost the company money. If they had added personnel at the beginning, they'd have gotten more dollars per hour. Every. Single. Time.