Employee productivity makes or breaks an organization’s success. Employees are often referred to as human capital, and not without reason. A company’s combined workforce holds all the skills, experience, knowledge, attitudes, and motivations to create the life-force that sustains a business.
All other forms of capital are static, and although they can increase in number and monetary value, they need the workforce to drive that improvement. Employees are the only capital that can develop themselves and contribute collectively towards a company’s achievements.
But workplace productivity doesn’t just happen spontaneously. Various factors determine how productive your staff will become.
What is employee productivity?
Employee productivity (aka workforce productivity) is a measure of how much work an employee delivers within a specific time. It can also be used to quantify the output of a group or team.
To measure anything, you have to have predetermined standards and timeframes. Those can be established by taking an average based on the collective output of people performing the same job.
For example, in manufacturing, if it takes a group of workers an hour, on average, to put out a finished product, then an hour is your measure for production. In sales, it can be based on the number of leads sourced and leads converted to sales every week or month.
But high productivity alone doesn’t translate to success. We also have to bring effectiveness and quality into the equation to identify star performers. Back to manufacture: someone who churns out a high number of products in record time can be considered productive.
If, however, those products are regularly rejected by quality control, the employee isn’t effective and could end up costing the company.
Likewise, with sales, someone who sources hundreds of leads, but coverts few to sales is productive but ineffective. Conversely, a colleague that sources far fewer leads but converts most of them into sales is both productive and effective.
We also have to factor in whether an employer is promoting productivity and effectiveness by providing the best environment for their staff.
How can employee productivity be improved?
Employee investment isn’t about how well you negotiate salary and wage packages. When we hire someone, we trade their time, skills, and experience for the money. It’s a sale similar to how we pay, say, an electrician to repair a fault at our home. They give us a price which we accept. They do the work that was in the quotation, and we pay for the service. That’s it, skills, and experience in exchange for cash.
If employees are human capital, then there must be employer investment. All forms of business capital are backed by investment. Employers invest in their staff to get higher levels of employee productivity and a decent ROI. If you don’t set people up for success, you can’t expect them to stay productive.
How should employers invest to maximize productivity?
- Ensure that the work environment is kept clean, safe and healthy
- Consider things like lighting, air quality and temperature regulation
- Replace or repair damaged or broken essentials, like furniture
- Replace outdated technology and upgrade software regularly
- Ensure that all production and office equipment is maintained
- Keep all stock at optimum levels to avoid production delays
- Keep up to date with industry developments to stay relevant
- Give employees the authority to make independent decisions
- Develop a robust training and career development strategy
- Have various communication channels to keep people connected
- Have a confidential communication channel for personal issues
- Implement awards and rewards programs and use them
- Have chill-out areas where employees can relax and refuel
- If you offer a canteen, stock it with healthy food and drinks options
- Provide kitchen conveniences to prepare healthy meals and drinks
These investments make the workplace comfortable, proactive, and a nice place to be. Considering how many hours employees spend at work, employers must provide a pleasant environment if they expect high levels of productivity.
Other measures of workforce productivity
Many measures can indicate whether your workforce is productive or not. Here are a few.
Deadlines and goals
All departments work to deadlines, whether they answer a call within three rings, respond to a chat inquiry within 30 seconds, or get reports out by month-end. Then there are customer deadlines as well.
Companies commit to delivery dates, installation dates, live system dates, etc. How many deadlines does your organization miss? You can track missed deadlines to departments that cause bottlenecks and even specific employees who hold up processes.
Cancelations and returns
High levels of canceled orders or contacts and goods returned indicates poor quality control and customer services, as well as bad management.
Not keeping up with the latest industry developments and trends can be another reason. Few customers will randomly cancel contracts or return goods.
They won’t hesitate, however, if they keep getting poor service, delays, outdated options and if your pricing isn’t competitive.
Time versus results
If you’re tracking performance and employee productivity accurately, you’ll quickly pick up if your company takes longer to deliver results and make a sale than your competition.
This measure relates directly to profits and being better than your competitors. Is your workforce the problem, or is it bad management, weak operating systems, lack of training, or outdated equipment?
High employee churn
If you’re regularly replacing employees, you must be spending a lot of time on training newbies, and that amounts to lost profits.
If resignations become a trend, you must get to the heart of the matter quickly. An unhealthy work environment, toxic culture, inadequate systems, obsolete equipment, and old technology, can all lead to employees looking elsewhere.
Also, being on the receiving end of customer complaints all the time can make staff head for the door.
Likewise, poor management that doesn’t recognize hard work, or address slackers is a motivation killer. When all employees are treated the same, irrespective of their level of contribution, people will leave.
Last but not least, this is the ultimate measure, but unfortunately, it’s a historical one (bi-annual or annual). You only know how much profit you’ve made when all costs (direct, indirect, and hidden) have been factored in.
If you’re making the profits you expected or exceeding them, then your workforce is productive. If your profits are falling, you’ve probably been bleeding money for quite some time, and you could even have some brand damage.
All of these issues are critical to business success and need a strict and thorough investigation immediately. Once you’ve identified the source of reduced productivity, you can implement changes to improve work efficiency and increase profits.
Strategies to increase productivity in the workplace
Don’t wait until figures (and customer complaints) show that business productivity is waning. Implement strategies to not only keep your workforce focused, but also to maximize productivity.
Increasing productivity in the workplace begins with your recruitment methods. If you appoint the right people who are aligned with your vision and motivated by your goals, you’re already in the right place. Then implement best practices to keep your workforce engaged, happy, and productive.
Productivity statistics tell us:
- Using technology like an applicant tracking system together with collaborative hiring and understanding the value of benefits over salary helps you make the best hiring decisions.
- By using social technologies, companies can increase the productivity of knowledge workers by 20% to 25%. Keep your people connected!
- High performing employees share three traits: talent, high levels of engagement, and over ten years of service with the company (IOW, they’re stayers).
- Superior talent is eight times more productive than your average employee. Ensure that there are at least a few top performers in every department to improve motivation and increase productivity.
- Robust employee onboarding processes improve employee retention by 82% and increase productivity by 70%.
To sum it up
Employers are the real drivers of employee productivity. It starts with getting hiring right, and that means that you understand your business goals and the type of people who’ll buy into them.
Businesses have to create the right environment so that employees are happy. Staff also want to understand their role, know that their contribution matters, and that they’ll get the training they need to succeed.
Money matters. But career prospects, additional benefits, open communication, and the opportunity to grow and contribute count just as much.
C-suite executives and middle management must keep up to date with industry developments and trends, and keep their employees updated. These are factors that increase productivity.
Finally, be known as an organization that always keeps their word: to customers, employees, suppliers, and anyone else. Company productivity, as a whole, is built on relationships and trust.
Read more about improving employee productivity in hybrid working companies.