To a degree, every employee at every level will understand the effect that productivity – or lack thereof – can have on a company.
However, business owners and members of their boards bear the brunt of ‘lost time on task’ the most. They will be aware of the strain that lost productivity places on their workforces, and they will see the unfavourable impact it has on their bottom line.
In 2022, insurance provider Vitality conducted some research into how much the British economy has been losing out due to poor productivity. The stats were shocking: in that year, British businesses lost an average of 51 days per employee, either to outright absence or a lack of productivity during working hours. To put this into perspective, this lost time equates to around £127.9bn when taken across the economy.
It’s a downward curve that we need to tackle if we want our staff to remain happy in their roles, and our firms to remain successful.
Here, we discuss the origins and outcomes of poor productivity in a work environment. We also share ways to combat lost days based on our finance directors’ experience of working within and alongside businesses that have struggled with this issue.
What could affect productivity in your workplace?
Burnout, depression, long Covid, and permanent home working arrangements were some of the many reasons cited for the downward trend as per the last available Vitality report. But there are plenty of other reasons why your employees may not be able to work or perform at their best, despite their best intentions.
Many processes, approaches and behaviours within your business can hinder productivity, and some of them may be ingrained in your day to day. For example, staff may not be as productive if:
- They are affected by particularly loud, disruptive or toxic colleagues
- They are regularly encountering other distractions; snack breaks and those so-called ‘water cooler moments’ are eating into their time
- They are asked to attend too many meetings (many of which could be either shortened or dealt with via email)
- They are having to respond to too many phone calls or messages, creating a sense of overwhelm and making it difficult for them to prioritise tasks
- They are spending too much time procrastinating on social media or the internet
- They are grappling with slow, outdated technology
- They are not taking proper breaks throughout the day
- They are regularly working overtime to try and stay on top of their workflow
- They are struggling with their own wellbeing, particularly with regards to their own mental health
- They are experiencing personal problems that are outside of your firm’s control
- Their motivation or morale has been compromised, perhaps due to poor communication from management, recent redundancies, or frustrations with the way issues are handled internally
What are the outcomes of poor staff productivity?
Sub-par productivity can have a significant effect on the individuals within your teams, and this same effect will eventually be felt in your business’ performance.
Poor productivity leaves employees feeling less creative, less engaged, and less likely to hit their targets. In turn, this leads to regular absenteeism and, in more extreme cases, higher staff turnover. Both are critical to the smooth-running of your business and its potential for growth – and both will ultimately lead to loss of profits if they are not addressed.
Plus, there’s the negative impact poor productivity will have on your customers’ perception of your business. And as we all know, it’s much more costly to claw back a sullied reputation than it is to make sure that reputation is never tainted by a poor experience in the first place.
If you suspect that productivity levels within your organisation could be much higher, it’s time to get to the root of the problem, make some important decisions, and set your staff back on the right path.
How can productivity be improved?
Here are just a few suggestions for improving productivity within your business:
Revisit your processes
Could you be doing things better? Would you benefit from fresh insight to make sure your systems and processes are supporting your staff and facilitating their best work? Often, we carry on doing things the way we’ve always done them, usually for convenience or because we’re daunted by change. But making some adjustments could improve the automation of tasks, free up employees’ time, and allow them to deliver more, faster. Don’t be afraid to bring in a third-party consultant if you don’t know where to start, and you feel you would benefit from their impartiality and specialist advice.
Set achievable goals for staff
Setting goals for staff that are tailored to their job roles will enable your employees to prioritise and delegate tasks. In turn, this will lead to greater engagement in their work. You will also help them avoid the fatigue of larger, more complex projects by measuring smaller objectives that demonstrate clear, specific progress in certain areas.
Invest in better technology
Slow systems, out of date hardware, poor connectivity – all of these will contribute to a steep decline in staff productivity (not to mention morale!) if they are not dealt with. There will be an initial outlay, which can affect cash flow, but in most circumstances, any investment you make in systems and devices that can better support your staff in their roles will pay back dividends.
Address toxicity within your company culture
Toxicity can sometimes be difficult to define. It can manifest as outright manipulation, harassment, or discrimination – or it can be less apparent that your staff notice through instances of misguided or unwelcome comments, a lack of cooperation, and other forms of microaggression.
Regardless, if certain coworkers are affecting productivity – either through their disruptive actions, consistently poor performance, or by overstepping boundaries – you will need to follow the correct channels to address your concerns and re-establish your expectations of them. In the first instance, this will usually involve gathering feedback from affected members of staff and documenting instances where their behaviour has been unacceptable.
We would always recommend consulting an HR professional prior to arranging any meetings or issuing any warnings, as they will be able to talk you through standard procedure and make sure the case is handled sensitively and in line with current employment guidelines.
Adapt employees’ positions where necessary
As every business evolves, so will their staff’s roles.
In many cases, technology will often streamline a process to the point where it can be entirely handled by software. In others, a business will reach such a scale that it requires staff with different or higher levels of skill than previously.
If it’s time for a staff shake-up, redundancies are not the only option. In fact, letting people go could in itself have an indirect influence on productivity; nobody wants to see good people go, and sackings will make others feel much less secure in their work, leading to feelings of stress, anxiety and resentment that will start to drain the drive and confidence from your teams.
We always recommend working to retain good staff wherever possible. Could you adapt that person’s role so they still play to their strengths, but take on different tasks and responsibilities? Could you split or reallocate their time so they take on an additional role? Has another post become available that they might be better suited to, and will they be willing to make the move? There are often many left-field ways to handle change – it’s just a case of finding them.
How can our finance professionals help to measure your employees’ productivity?
As outsourced finance directors, we can provide broad advice on how to improve productivity across most areas of your business. That said, we are most concerned with your company’s financial productivity: that is, how much time, resources, and effort you are placing into a job or project in order to achieve the desired result, and whether this result is generating an acceptable level of profitability.
High margins, fast turnarounds and good customer satisfaction levels can provide hints that your business is on the right track – but one of the easiest ways to measure financial productivity specifically is by looking at the ‘time saved’ metric. We will often go further than this and look at how this ‘saved time’ has been repurposed by your staff. Ultimately, freeing up staff hours will enable your workers to focus on the things that matter more to your organisation; the output that centres on the ‘value-adds’.
If productivity is an issue within your business, don’t be bound by the way you’ve always done things. Contact Dartcell for more information on how our team can support greater productivity within your firm. Our team can help you find new solutions to pressing problems and monitor the impact that your internal changes are having on the bigger picture.