14 Aug The key to raising employee productivity
The UK’s biggest economic problem is low productivity
Believe it or not, Brexit chaos is not the UK’s biggest economic threat. Whether we remain or leave the EU, or whether we have a hard or soft Brexit, what really holds back our standard of living is low employee productivity.
Employee productivity in this country, as measured by the amount the average employee generates in added value per hour, is lower than just about all of the other G7 economies. Significantly, UK productivity is a massive 30% lower than the best of that group. This poor performance is a real dampener to the UK trading competitively with other nations in or out of the single market. Low productivity is also the underlying reason why we are getting poorer. Similarly, low employee productivity is the real reason why we seem to find it increasingly difficult to fund cherished projects such as the NHS and our defence commitments.
USA productivity has enabled a 40% increase in exports to the EU
To illustrate how damaging low productivity is to trade, just take the experience of the United States. Almost top of the league for productivity, the US has managed to increase exports to the EU by 40%, since 1993 (the first year of the single market). On the other hand the UK has only managed a 5% growth rate of exports to the EU. This minimal growth is despite having all the advantages of the UK being in the single market.
In 1993 the UK goods trade deficit with the EU was £5billion. By 2016 the deficit had rocketed to £95.6 billion. In or out, if we want to trade profitably with France and Germany in particular, we simply have to improve productivity. And this means every employee achieving more for every hour’s work they do.
Policy makers argue about different means to boost productivity. For instance you often hear debates for increased investment and regeneration of our infrastructure. Others contend that we need changes to the banking structure, and increases in government expenditure, and so on.
All this debate, but policy experts seem averse to looking at the most easily available area for massive improvement.
Perhaps of even more importance, it is an area that is in the immediate control of every manager and owner in the country. The plain fact is that we urgently need to look at the way we manage our organisations.
Improved management culture could lift productivity by 30% – 60%
With an improved management culture we could lift employee productivity by 30% – 60%. OK, I agree that at first hearing this sounds ambitious, if not altogether improbable. But the research shows that we now have available new scientific management principles that enable us to work with human nature rather than against it. Using a more natural approach transforms productivity, because it reduces what is known as ‘organisational stress’. This may need a bit more explaining.
Is your organisation stressed?
It is well known that stress adversely influences an individual’s decision-making and productive capability. What is less well known is the impact that stressed people have on the organisations they work in.
The received wisdom is that stress costs our organisations in terms of absenteeism, sickness and on occasional compensation claims if things go badly wrong. But research shows that the real costs go way beyond this restricted view.
In the boardroom
Board level stress contributes to poor judgement, destructive competitive rivalry, incompetent or rash decision-making and unethical behaviour.
At management level
Management level stress drives rushed and inadequate operational planning, corrosive impression management, defective analysis, flawed problem solving, faulty decision-making, weak relationship building and demotivating leadership.
On the shop floor
Stress at shop floor level provokes inauthentic working relationships, personal conflicts, accidents, costly mistakes and rework, lethargy, low creativity, waste, disloyalty, resistance to change and incoherent teamwork.
Wherever you find stress in the system it acts like grit in the gear box. Stress clogs everything up, slows work down and provokes undue wear and tear on the system itself. Is it any wonder that stressed organisations have low productivity? And lets face it, stressed organisations are everywhere.
Organisational stress creates an inhospitable working environment
The unavoidable fact that we have to come to terms with is that most organisational stress derives from the way we run things.
This unfortunate state of affairs arises because of a cultural ignorance about the human stress response. The average manager has no training or understanding of the impact of the stress response on employee productivity. As a result they do not take stress into account when designing organisational activity.
Thus we see that leaders unwittingly create structures, procedures, processes and controls that create an inhospitable working environment. It is for this reason that typically our organisations are stressful places to work. The resultant pervasive stress levels cause employee productivity to plummet and the whole system to under perform.
Neurobiology is transforming the potential for employee productivity
The good news is that science has discovered more about the human brain in the last thirty years than in the previous three hundred. One upshot of this is that we understand the nature of the stress response and how it corrupts thinking. This new knowledge is already transforming psychotherapy outcomes. But why do we have to stop at psychotherapy? With these simple advances we can also help managers to identify what stress factors are holding back employee productivity. It is then a simple step to equip them with the necessary countermeasures.
The first step to transforming employee productivity is to carryout a stress audit. The data from a comprehensive stress audit shows the nature of the ‘stressors’ present in the organisation. In addition, an audit also estimates the cost of these stressors to the bottom line. With this invaluable information you have the tools to then rectify the problem. The audit will guide you to make appropriate changes to the management function, leadership style and organisational design. Amazingly, even simple changes can transform employee productivity by upwards of 30%. Furthermore you can usually make these changes at almost zero cost and with an almost immediate impact in terms of performance.
Sounds useful? If you would like to know more about how to increase productivity at your place of work call 0845 0945 819. Or email [email protected]
Jeremy is author of ‘Reinventing Management Thinking; using science to liberate the human spirit’. This groundbreaking management manual explains why stress is so harmful in the workplace and how to remove it. Jeremy introduces the concept of the 30 stressors and how to remove them to transform productivity and performance.
Jeremy has twenty-five years experience as an independent management coach to small and mid-sized enterprises and non-profit organisations. This has included facilitating 54, strategic change or business improvement assignments across a wide range of industry sectors. On average these techniques yield an estimated 30 : 1 ROI for clients. In addition, Jeremy He is qualified to MBA level, with a post-graduate diploma in psychotherapy. He has delivered training workshops on organisational stress for Mindfields College.