What Is Idle Time, and What Does It Mean for Businesses?

What Is Idle Time?

Idle time is paid time that an employee, or machine, is unproductive due to factors that can either be controlled or uncontrolled by management. It normally applies to full-time workers rather than consultants, who typically have to bill for every hour of their time.

Understanding Idle Time

Idle time is a period of time associated with employees waiting. That may be because a piece of machinery they need to use isn't working, they are waiting for an important shipment, or the company is overstaffed and not everyone paid to be there has a task to do.

When employees are not engaged in productive activities it can have serious implications for employers. According to a 2018 study from the Harvard Business School, 78.1% of workers find themselves on a weekly basis with involuntary idle time, which costs employers an estimated $100 billion per year.

Types of Idle Time

Idle time can be classified either as normal or abnormal.

Normal Idle Time

Normal idle time is categorized as "downtime" for regular maintenance and repair. Regularly scheduled downtime for manufacturing assets is a normal business practice and cannot be controlled by management.

Abnormal Idle Time

Abnormal idle time, such as a worker strike, is out of the ordinary and can, in many cases, be controlled by management. Time management is extremely important in any business, particularly when there are high fixed costs. Idle machinery or equipment generates depreciation expenses and also reduces output productivity.

Examples of Idle Time

Company managers who do not efficiently schedule work shifts or operations flow may cause idle time. Employees themselves, too, may be responsible for causing idle time.

For instance, if a car factory assembly team makes 100 cars in an eight-hour shift and the quality inspection and testing group processes only 50 cars during that shift, the assembly line would have to idle for a period of time until the quality control group caught up to pace.

A natural disaster could also be the reason for idle time. Floods, for example, frequently result in stoppages of loading and unloading of containers at shipping ports or railway terminals, which would have a ripple effect on factories that rely on these transportation networks. With a surplus of finished inventory, factories would be forced to idle both workers and manufacturing facilities until goods started moving again.

The Bottom Line

No business runs at 100% efficiency over long periods of time, and idle time is inevitable. However, the goal is to minimize this "cost" to the company through careful scheduling and coordination with connected groups. In addition, it is advisable for managers to draw up contingency plans to keep operations running when an unexpected event arises.