If your organization has suffered from lower employee productivity levels in the past few years, you’re not alone. Recent studies and statistics indicate declining productivity rates in many Western workplaces.
According to a recent study by Washington-based think tank The Brookings Institute, over the past 10 years productivity growth has slowed in both advanced and emerging markets and also in developing economies. The study finds that declining productivity isn’t limited to certain segments, but occurs across industries and sectors. And recent numbers from the United States Bureau of Labor Statistics (BLS) show that, between 2007 and 2016, productivity in America grew at only about 1.2% per year — some of the lowest figures in the past few years.
When productivity goes down, so do your profits. If your organization faces a declining productivity challenge, use these tips to get back on track.
For businesses suffering from sluggish productivity, consider your staff’s health.
“Chronic health conditions are on the rise in America and this leads to increased symptoms of pain, fatigue, immobility, illness, and other factors,” says Aaron Hackett, DPT, owner of physical therapy business AevitasPT. “This makes it hard for an employee to produce at an optimal level,” he says. Hackett, who is a doctor of physical therapy specializing in corporate wellness, says there’s ample evidence that wellness and productivity are related. “Studies even as recent as July 2017 have identified things such as musculoskeletal pain and psychological wellness as factors in lower job productivity and job satisfaction.”
Hackett referred to one such study, published in the July 2017 issue of the American Journal of Occupational & Environmental Medicine, which concluded that “Office worker health-related productivity loss is represented by a combination of both individual and work-related factors. “Another point in this article that’s important is that it appeared these reductions in productivity are rising for those in manager and supervisor positions,” says Hackett. “When a leader can’t perform well, can we expect all those below them to be any better? This can certainly have a cascading effect at the workplace.”
To combat health-related productivity issues, introduce a wellness program to your workplace. However, before shopping for a plan, Hackett suggests reviewing your organization’s data for evidence of health-related declining productivity. Start by comparing employee claim data against drops in productivity.
“Are you seeing increases in health claims or dollars spent just before the productivity decline? Maybe there has been a gradual increase in these claims.” Hackett says to look at all of your on-the-job injury reports as well. “Not just the reportable incidences, but what about the small aches and pains? You will also want to look at rates and reasons for sick leave. It is very possible as increase in these will coincide with a decrease in productivity.”
Hackett says you may have to study specific departments to find patterns and clues that could indicate that a wellness program would improve your business’ productivity levels. While there are many large companies offering full-service wellness packages, if your data points to just one or two issues, Hackett says a wellness consultant could be the answer.
“A consultant can also help you mine additional employee data in regards to the wellness culture at your company,” he says, adding that targeted wellness services can be simple and have lower costs than packaged services. “You can address the primary wellness needs of your employees, then track productivity as the programs proceed.”
Though your business may operate on a strict 9-to-5 schedule, not all of us are at our most productive within those hours. According to Alison Brehme, founder and CEO of Virtual Corporate Wellness, offering flexible schedules is a key to combating declining productivity rates. “Explore offering remote opportunities and flex time to your employees,” she says. “Providing alternative schedules can definitely enhance productivity.”
Numerous studies have found that giving employees the opportunity to choose a non-traditional schedule has productivity benefits. Most recently, a University of Minnesota and MIT Sloan School of Management study split 700 workers at a Fortune 500 company into two groups. The first group received pilot program training on how to improve control over their work lives, including the opportunity to implement flexible work schedules. The second group continued to operate under the existing company policies.The results? The first group became measurably more efficient and productive.
Nothing dampens productivity like being stuck in a long, boring, unproductive meeting. Yet in the quest to become more collaborative, your team may spend more time than ever before in meetings that they don’t need to attend. For example, a recent Harvard Business Review article reported that executives now typically spend up to 23 hours a week in meetings, 10 hours more than they did in the 1960s!
Brehme says that by developing structured outlines and limiting required attendance to key participants, you’ll reduce meeting times, improve efficiency, and combat declining productivity as workers are freed up to carry on with other tasks.
“Create requirements for when employees should set up a meeting, and what is needed to make sure it’s efficient,” says Brehme. “Be particularly wary of large meetings with multiple or undefined goals – these are often wasting time and productivity.”
Do your employees feel invested in your organization? If not, maybe it’s time to give them the opportunity to become owners, while boosting productivity rates at the same time. Douglas Kruse, Associate Dean and Distinguished Professor of the Rutgers School of Management and Labor Relations, has found that employee ownership is one way to increase productivity.
“Employee ownership may enhance company performance by aligning the incentives of workers and owners so that productivity-reducing conflict is minimized and productivity-enhancing cooperation and innovation are encouraged,” he says. Kruse says that a recent meta-analysis of existing studies, with 102 samples covering 56,984 firms, found employee ownership has a small but significant positive relation, on average, with firm performance.
“The positive relation exists across firm size, and has increased in studies over time, possibly because firms are learning to implement employee ownership more effectively,” he says. Yet as Kruse points out, correlation does not imply causation. As he explains, “many studies have used pre/post comparisons and statistical corrections based on predictions of who adopts employee ownership, and the generally positive relationships remain. The results are consistent with laboratory experiments in which subjects randomly assigned into groups that functioned as employee-owned ‘firms’ had higher productivity,” he says.
But what about those “free-riders” – the employees that are ready to take shares but not so ready to reverse declining productivity? According to Kruse, the evidence on firm productivity “goes against the idea that free-riding overwhelms any possible positive effect of employee ownership.” And positive peer pressure also comes into play.
“Workers themselves report behaviors that counter free-riding,” he says. Kruse says that a study of over 40,000 workers found that those with company stock and other group incentives were more likely to say they would take action if they saw a fellow worker not working well, by talking to the worker, supervisor, or members of the work team.
“When asked why, many of these workers reported that ‘poor performance will cost me and other employees in bonus or stock value.’” says Kruse. “This and other studies also indicate that employee owners generally have lower turnover and absenteeism, more company pride and loyalty, greater willingness to work hard, and more suggestions of how to improve performance.”
If you suspect your organization’s productivity rates are down, take action. Consider the possible causes as mentioned above, then create a plan to address each issue in order to reverse declining productivity rates.