Productivity vs profit. How to maximise productivity in 2020.
According to The Harvard Business Review, a gifted mathematician was hired by a large organisation to come up with a sophisticated formula for measuring the productivity of staff members across a range of departments.
Even though profit was soaring, the board was completely blindsided and baffled when they received the company’s results three months later.
Despite (on the outside) everything looking good, actual productivity across departments was excruciatingly low. Employees simply weren’t performing in their roles, and there was a HUGE opportunity for improvement.
The mathematician revealed that productivity (and profits) could be increasingly strengthened if a range of productivity strategies and high growth planning were implemented.
Other factors (such as low production costs, overheads, and high-profit margins) were contributing to high profit, but low productivity. This was in fact masking and hiding the poor productivity of employees across the company.
Check whether your profits are the direct result of staff productivity, or if other factors are indeed involved.
Here are 4 strategies on how you can increase the productivity of staff, and improve performance.
1. Hire & pay staff well.
The old baggage – “You get what you pay for” generally rings true. If you are paying your staff minimal wages, you will often have staff showing up half-enthused. When an employee feels undervalued, they will often produce undervalued work.
If you are hiring graduates or interns (yes, some can be amazing), for a cheaper rate with less experience, you may find yourself retraining or outlaying more financially in the long run, instead of paying an experienced technician/field expert (up to three times more expensive in the short run) to execute a project in a shorter amount of time.
The average cost of the hiring of a new position is $20K in training, induction and contractual review per new employee.
2. Find their zones of genius within their roles & responsibilities.
What are your employees brilliant at? What is their zone of genius? Is there a particular and unique set of skills they offer which contributes to a competitive edge for your business?
To find this out, ask them in the interviewing process what they think they’re good at. Ask them what they feel totally natural at, and what brings them the most joy about their role.
When a staff member is not performing, it is likely they are working in an area they are generally not skilled at, or not what they are naturally good at.
3. Hire happy, healthy people.
Happy, healthy people generally make healthy, happy workers.
The cost of sickness in the workplace costs Australian businesses over $33 billion dollars per year and over 94 million days lost per annum (McDonald – Third Sector, 2019) in productive workdays.
There is a growing body of research to link happiness to productivity within the workplace.
“There is now growing evidence that when one’s employees are happy, organizations thrive,” says Dr. Camille Preston – a member of Forbes Council.
“One study found that happy employees are up to 20% more productive than unhappy employees. When it comes to salespeople, happiness has an even greater impact, raising sales by 37%.”
4. What do they LOVE?
When you love what you do, you tend to spend more time doing it, and become more of a master at that skill. Injecting passion and love into your task at hand can be an effective way of boosting productivity.
Connect your staff with something they love doing, which in turn has a mutual benefit for the productivity of your business.
5. Measuring productivity: Sometimes it’s not about productivity.
As mentioned above, why can profitable businesses still operate at a low productivity rate? Why do some businesses who are highly “productive” seem to be spinning their wheels?
If you are certain your team is doing the best they can do, and you have resounding confidence in your team, what may be broken in your business model?
Assess both productivity of staff, but also productivity as a business. You may be producing high volumes of sales, but crippled by high overheads.
Bespoke HR not only assesses your people’s performance but encompasses all aspects of your business when developing productivity strategies.
To book a free consultation, click here.