When Your Best Techs Work 60 Hours and Your Newest Sit at 30

The Silent Margin Killer

Overtime is the silent margin killer. Not because techs work too much — because the WRONG techs work too much.

A service manager I spoke with recently put it perfectly: "What are technicians that are over 60 hours, while others don't have 40 hours of work for next week?" He knew the answer was bad. He just didn't know how bad.

Here's what's happening in most contractor shops: the top performers get dispatched to everything because they're reliable. They stack up 55, 60, 65 hours per week. Meanwhile, newer or less experienced techs sit at 25-35 hours. The payroll looks the same. The revenue does not.

This isn't a scheduling inconvenience. It's a structural margin problem, and across the 2,200+ contractors I've reviewed, it's one of the most common and most expensive mistakes.

The Overtime Math

Let me make this concrete.

Take a mid-market HVAC contractor billing at the median rate of $90/hr with a loaded labor cost of $52/hr (base wage plus taxes, benefits, workers comp, PTO — the full burden). At regular time, that's a 42% labor margin. Solid.

Now look at what happens at overtime:

The 60-hour scenario generates $1,760 in margin. The same 60 hours split across two techs at regular time generates $2,280. That's $520 more margin per week — same number of hours billed, same bill rate, same work completed.

Scale that across a 10-tech crew where three or four consistently run overtime: you're leaving $80,000-$120,000 per year on the table in avoidable overtime premium.

Why It's Worse Than It Looks

The table above assumes you're billing overtime at the same $90/hr. Most contractors do. But your cost at OT is time-and-a-half:

Your labor margin goes from 42.6% to 21.7%. On the heaviest OT weeks, when a tech pushes past 60 hours and fatigue-driven callbacks start adding unbilled return trips, the effective margin can drop below 15%.

And here's the part nobody calculates: the tech sitting at 30 hours is still on your payroll at full cost. You're paying 40 hours of wages for 30 hours of billable work. That's a 75% utilization rate — meaning a quarter of your labor cost produces zero revenue. Meanwhile your overloaded tech is running up 1.5x wages on every hour past 40. You're eating the OT premium on one tech AND the bench time cost on another. The margin destruction is compounding.

How to Measure Workload Balance

Most contractors track total hours per tech. Few track the variance. The variance is what matters.

Workload Balance Score: Take the standard deviation of weekly hours across your techs and divide by the mean. The lower the number, the more balanced your dispatch.

To calculate it: pull last month's hours by tech from your field service software. Compute the average and standard deviation. Divide. If the number is above 0.25, you have a scheduling problem worth fixing.

The Data Supports This

From the operational data across our dataset:

• 40% of jobs exceed budgeted hours. That means 4 in 10 jobs are running long — and when those jobs land on your already-overloaded senior techs, the hours compound into OT.
• 18.3% of jobs blow past 150% of their budget. These are the jobs that turn a 45-hour week into a 58-hour week for one tech while three others are light.
• Billable hour ratio ranges from 15.8% to 102.8%. The spread is enormous, and most of the low end isn't lazy techs — it's techs who aren't getting dispatched.

The contractors running well-balanced schedules cluster at the top of utilization benchmarks. The ones with wild imbalances have both overtime problems and underutilization problems — at the same time, on the same payroll.

The Dispatch Optimization Framework

Fixing workload imbalance isn't about dispatching randomly. It's about dispatching intentionally with two variables: skill match and workload state.

1. Skill-Based Routing

Not every tech can do every job. That's fine. But most contractors over-index on "who's the best" and under-index on "who can do this adequately."

Map your techs into skill tiers for each job type:

The key insight: most jobs don't require Tier 1. A residential service call doesn't need your 15-year veteran. A Tier 2 tech handles it at the same bill rate with no OT risk.

2. Workload-First Dispatch

Before assigning a job, check current weekly hours for eligible techs. The dispatch decision tree:

1. Filter by skill. Who is qualified for this job type?
2. Sort by current hours. Among qualified techs, who has the most capacity this week?
3. Check geography. Among the lowest-hours qualified techs, who is closest? (Reducing drive time improves utilization for both techs.)
4. Assign.

This is the opposite of what most dispatchers do. The default behavior is: "Who's my best tech? Send them." The optimized behavior is: "Who's qualified and has capacity? Send them."

3. Weekly Load Balancing Reviews

Every Monday morning (or Friday afternoon for the following week), pull the scheduled hours by tech and look for imbalances before the week starts. Move jobs proactively. It's infinitely easier to rebalance a schedule on Monday morning than to manage an OT problem on Thursday afternoon.

Track two numbers each week:

• Max/min spread: The difference between your most-scheduled and least-scheduled tech. Keep this under 15 hours.
• OT forecast: How many techs are projected to exceed 40 hours? If more than 20% of your crew is trending toward OT, redistribute before it happens.

When Overtime Is Actually Profitable

Not all overtime is bad. There are three scenarios where OT makes financial sense:

1. Emergency Service at Premium Rates

If you bill emergency/after-hours work at 1.5x or 2x your standard rate, OT cost is offset by OT billing. At a $135/hr emergency rate against a $70 loaded OT cost, your margin is 48% — better than regular time.

The rule: OT is only profitable when the bill rate also increases. If you're billing OT hours at regular rates, you're losing margin on every one of them.

2. Contractual T&M with OT Pass-Through

Some commercial contracts explicitly allow billing labor at OT rates when the work requires it. If the customer is paying for the OT premium, the margin impact is neutral. Check your contracts — many contractors don't realize they have this provision and eat the OT cost unnecessarily.

3. Revenue Capacity Constraints

If you're turning away work because you're fully booked, OT on existing techs can capture revenue you'd otherwise lose. The margin is lower, but it's incremental revenue with zero hiring cost.

The threshold: OT is worth it when the alternative is turning away a job entirely. It's not worth it when the alternative is dispatching a different, less-loaded tech from your own crew.

The Callback Multiplier

There's a hidden cost to overloading your best techs that doesn't show up in the overtime line: callbacks.

Fatigued techs make mistakes. A tech on hour 55 of the week isn't as sharp as they were on hour 25. In our data, 40% of jobs already exceed their budgeted hours. When those over-budget jobs are staffed by exhausted techs, the callback rate increases — and every callback is unbilled labor on a job you already closed.

If your callback rate on jobs completed during OT hours is higher than your baseline callback rate, the true cost of overtime is even worse than the wage premium suggests. Track it. Most contractors don't.

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The Bottom Line

The contractor with 10 techs averaging 42 hours each will almost always outperform the one with 5 techs at 60 hours and 5 at 25 hours. Same total hours. Same payroll. Dramatically different margins.

Overtime isn't a badge of honor — it's a pricing and scheduling failure. Your best techs shouldn't be subsidizing your dispatch process with their time. Balance the load, protect your margins, and save the OT for the situations where the customer is paying for it.

The fix isn't complicated. Measure the variance. Route by capacity, not just capability. Review the schedule before the week starts. Most of the damage is avoidable with a Monday morning spreadsheet.

Q: How does Level identify scheduling imbalances? A: We pull hours by technician from your field service software and calculate the workload balance score weekly. When we see techs consistently above 50 hours while others are below 35, we flag it with the dollar amount of margin being lost to OT premium. We also cross-reference with callback rates to show the full cost of overloading top performers. The first profitability audit is free.

Q: What if my top techs are the only ones qualified for certain jobs? A: That's a training problem, not a scheduling problem. If only 2 of your 12 techs can handle commercial controls work, every controls job lands on those 2 techs regardless of their hours. The short-term fix is workload-first dispatch for all other job types to create headroom. The long-term fix is cross-training your Tier 2 techs so the qualified pool expands. Most contractors can move a tech from Tier 3 to Tier 2 in 60-90 days with structured ride-alongs.

Q: How much overtime is acceptable? A: At regular billing rates, as little as possible. A well-run shop should have fewer than 10% of total labor hours in OT. Above 15%, you're almost certainly losing margin faster than the extra revenue justifies. The exception is emergency and after-hours work billed at premium rates, where OT is offset by higher billing. Track OT hours as a percentage of total hours weekly — if it's climbing, your schedule is drifting.