Employee Idle Time is a period of time while an employee is unable to carry out his or her usual tasks due to equipment breakdowns, energy outages, shortages of raw materials, or other reasons which are beyond the employee’s control. The employee idle time is accounted as costs of direct labor for employees, so their work is compensated as usually, but the organization doesn’t obtain the proper labour outcomes, therefore the idle time incurs losses to the organization.
The employee idle time is considered as overhead costs of an enterprise – indirect manufacturing costs to be allocated over all the production for a period. Employee idle time is a sign of Employee Underutilization, as capabilities of employees are not fully revealed and engaged to create maximal profit and benefit for the business employing them. To minimize employee idle time it is possible to do the following:
- To eliminate a problem causing employee idle time as quickly as possible;
- To rotate employees to another type of work;
- To engage reserves: spare equipment, reserved resources, additional workplaces, etc;