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 asked a version of this: which technicians are over 60 hours while others don't have 40 hours of work scheduled next week? The schedule showed an imbalance; translating it into a dollar cost required the payroll and job mix. That is one conversation, not a measured frequency.

Here's the pattern to check for in your own shop: 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 it's one of the first things I look for when reviewing contractor financials. Level has not published a measured frequency or cost for this pattern, so check it in your own payroll and schedule data.

The Overtime Math

Let me make this concrete.

Take a fictional HVAC contractor billing $79/hr. That matches the Level Index company-level median average billed labor rate of $79/hr. That figure comes from 1,770 contractors across trades, and the rate-card field is used inconsistently, so treat it as a positioning reference, not a verified HVAC price. Assume a loaded labor cost of $51.65/hr, built in the cost table below from base wage, payroll taxes, workers comp, benefits and allocated vehicle cost. At regular time, that's a 34.6% labor margin. Decent, but thin enough that overtime destroys it fast.

Now look at what happens at overtime:

The 60-hour scenario generates about $1,265 in labor margin. The same 60 hours split across two techs at regular time generates about $1,641. That's about $376 more margin per week: the overtime premium of $18.82/hr ($70.47 minus $51.65) on 20 hours. The hours billed, the bill rate and the work completed are the same.

This table charges the second tech's 20 hours at regular loaded cost. If that tech is already being paid for idle hours (see below), filling those hours saves more than the premium. That only holds up to their idle capacity, and only if they are qualified for the work.

Now scale that across a fictional 10-tech crew where three or four techs each run 20 overtime hours every week of the year. $376.40 x 52 weeks is about $19,600 per tech, or roughly $58,700 to $78,300 per year in avoidable overtime premium. Counterexample: if overtime only shows up in a 12-week peak season, the same math gives about $13,550 to $18,070. Use your own payroll overtime hours, not this example.

Why It's Worse Than It Looks

The table assumes overtime work is billed at the same $79/hr. Check your own contracts and invoices before using that assumption. Assume the worker is overtime-eligible and these hours require a 1.5x wage under the applicable rules. In this worksheet, workers comp scales with wages, the employee's Social Security wages stay below the annual wage base (Medicare has no cap), FUTA/SUTA are excluded from this worksheet, and allocated benefits and vehicle cost stay fixed. If your applicable workers-comp rule excludes the overtime premium from rated payroll, the same fictional worksheet would use $3.20 rather than $4.80 of overtime workers comp: total overtime cost becomes $68.87, the premium is $17.22 per hour and 20 overtime hours cost $344.40 extra. Confirm the actual policy and jurisdiction before choosing a basis. Your policy and jurisdiction may differ:

Your labor margin goes from 34.6% to 10.8%. If overtime jobs also require unbilled return visits, their margin can drop further. Compare callbacks and job complexity directly; these figures do not establish a fatigue effect.

In the separate idle-capacity scenario, assume a tech with 30 billable hours is actually paid for 40 hours. That creates paid idle capacity; it does not apply to an hourly tech paid only for the 30 hours worked. 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.

Level has not published a measured link between these bands and margin. The dollar impact comes from your own overtime hours and premium, not from the band.

To calculate it: pull last month's hours by tech from your field service software. Compute the score within each skill tier, not across the whole crew. Exclude part-time, seasonal and on-leave staff, and anyone who worked a partial week. Compute the average and population standard deviation for the defined group, then divide. If a tier scores above 0.25, investigate the schedule for that tier.

Here is a fictional counterexample. Take five full-time techs at 40 hours and three part-time techs at 20 hours. They score about 0.30, with a mean of 32.5 and a standard deviation of about 9.7, despite zero overtime. Drop the part-timers and the full-time score is 0.

The Data Supports This

These are related job-hour context figures from the Level Index, not a measured link between workload imbalance and overtime:

• 40% of jobs exceed budgeted hours. This comes from the Level Index: 315,393 jobs with both budgeted and actual hours, from 1,391 companies across trades. It does not measure overtime. But when over-budget jobs land on already-heavy senior techs, the extra hours can become overtime.
• 18.3% of jobs exceed 150% of budgeted hours in the same sample. One of those jobs can turn a 45-hour week into a 58-hour week for one tech while others are light.
• Billing capture runs from 66.9% at the 10th percentile to 102% at the 90th percentile across 963 companies. This is hours invoiced divided by hours logged on jobs. It identifies job time that did not reach an invoice, not paid capacity lost to weak dispatch.

Track technician utilization and billing capture separately. Utilization uses total paid hours and exposes scheduling capacity. Billing capture uses only job-logged hours and exposes invoice leakage. A shop can have an overtime problem, unused paid capacity, and weak billing capture at the same time.

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 operator check: identify work a qualified Tier 2 tech can safely complete under the same customer terms. Some residential calls still need a specialist. Check the recipient's total hours before assuming reassignment avoids overtime.

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 full-time tech within a skill tier. A starting target to adjust for your shop is under 15 hours.
• OT forecast: How many techs are projected to exceed 40 hours? Use an illustrative trigger, such as more than 20% of a tier trending toward overtime, and 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: Compare incremental billing with incremental cost and the feasible alternative. At the unchanged $79 rate and $70.47 overtime cost here, an added overtime hour still earns $8.53 before other added costs. It is less profitable than a feasible regular-time hour, but can be better than declining the job. A premium rate is not a necessary condition for profit.

2. Contractual T&M with OT Pass-Through

Some commercial contracts explicitly allow billing labor at OT rates when the work requires it. Passing through exactly the overtime cost premium preserves dollar gross profit per hour, not necessarily the same margin percentage. Verify what the contract permits and whether all incremental costs are covered. 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. Compare the incremental margin with hiring, subcontracting, schedule changes and declining the work. No new hire does not mean zero other added 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.

Fatigue can increase mistakes; a technician on hour 55 of the week may not be as sharp as on hour 25. Check your own callback and safety records rather than treating those hours as a measured cutoff. In our data, 40% of jobs already exceed their budgeted hours. When those over-budget jobs are staffed by exhausted techs, callback risk can rise. Level has not published a measured link between weekly hours and callbacks, so treat this as a hypothesis to test. Many callbacks are unbilled labor on a job you already closed, though some warranty or customer-caused returns may be billable.

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

Here is a fictional comparison. A crew of 10 techs at 42 hours each and a crew of 5 techs at 59 hours plus 5 at 25 both log 420 hours:

• The first crew pays overtime premium on 20 hours a week (10 x 2).
• The second crew pays it on 95 hours (5 x 19). If its light techs are paid for 40 hours, it also carries 75 idle paid hours.

At the page's $18.82 premium, that is about $376 versus about $1,788 of weekly overtime premium, before counting idle time. When the work can be moved between qualified techs, the balanced crew should usually come out ahead.

Overtime is a capacity and pricing decision. Unnecessary premium alongside usable qualified idle capacity is the failure to investigate. 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. Plan a structured ride-along period and measure readiness by job type. Use 60-90 days as an illustrative planning window, not a measured average, and adjust it to the job type and the tech.

Q: How much overtime is acceptable? A: At regular billing rates, as little as possible. Treat 10% of total labor hours in overtime as an illustrative internal ceiling to test, not a benchmark. In this page's example, every overtime hour billed at the regular rate costs about $18.82 more than a regular hour. The real test is whether those hours bring in work you would otherwise lose. 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.