Do you ever wonder why some teams reach goals faster than others? Or question what more you could be doing to help employees reach their full potential?
If so, you’re not alone. We’ve seen some major shifts over the past few years when it comes to the way employees work. And it’s causing many business leaders and managers to question the impact on employee productivity.
But what is employee productivity, really? And how can you improve it? Let’s address these questions and related topics about employee productivity right now:
- What is employee productivity?
- Why it’s time to start talking about employee productivity
- Why is employee productivity important?
- How is employee productivity changing?
- What factors impact employee productivity?
- When is employee productivity at its best?
- How to measure employee productivity
- 5 steps for managing employee productivity
- 9 ways to increase employee productivity
- How to create a culture where employee productivity can thrive
- Track, manage, and increase employee productivity with ActivTrak
What is employee productivity?
Employee productivity is a measure of how employees turn inputs (materials, energy, capital, etc.) into outputs (products, leads, revenue, etc.) in a given period of time. Productive employees embrace teamwork, use tools efficiently, automate workflows and continually look for ways to innovate.
The question is: Does productivity just come more naturally to some? Or are there steps leaders can take to increase employee productivity? In this playbook, we’ll help you discover a better approach to employee productivity — one that focuses on well-being, engagement and satisfaction in addition to output. We’ll also share some proven workforce productivity tips to create a work environment where employee experience and productivity go hand-in-hand.
Why it’s time to start talking about employee productivity
With the mass move to remote and hybrid work, the typical workday looks very different now than it did a few years ago. These changes to the traditional work environment come with many benefits. Remote work increases the available talent pool to include potential team members from across the globe. And numerous studies show that remote work improves work-life balance for employees.
For many, remote work means fewer interruptions and a quieter work environment, with more time to focus — all of which impacts productivity. Research shows that work-from-home employees are 35% to 40% more productive than their in-office counterparts and have the potential to save businesses $600 billion a year they’d otherwise lose to workplace distractions.
Still, questions remain. In one recent survey, an astounding 85% of business leaders say the shift to hybrid work has made it challenging to have confidence employees are productive. And for all the conveniences that come with flexible schedules, employees are also forced to navigate a wide variety of new challenges. These include dealing with unconventional work environments, relying more on virtual collaboration, managing increased control over work hours and handling unprecedented distractions that can make sitting at a desk — and staying on task — more difficult than ever.
Why is employee productivity important?
Productive employees can help businesses improve profits and customer service among other benefits. Here’s the full list of reasons why employee productivity is important:
Improve overall profits
When an employee takes too long to perform a task or provide a service, others suffer. Whether another team member is forced to pick up the slack or a dissatisfied customer posts a negative review, the inefficiency takes a toll on profits. Addressing the problem quickly and improving employee productivity is key to improving profitability. It’s why companies with highly engaged, productive employees not only have better retention and more customer satisfaction but are also 21% more profitable.
Increase employee motivation
When employees have the opportunity to better contribute to an organization, they gain a sense of purpose. Increasing employee productivity fuels motivation by helping people feel like they’re making a difference. Even something as simple as empowering people to make daily progress on meaningful work can be more motivating than incentives.
Identify the most valuable employees
Productive employees are most likely to be more engaged. When productivity improves, you truly see who’s committed to achieving business goals and who contributes to the bigger picture. This engagement is often linked to leadership, as is the amount of autonomy an individual feels and the degree to which they feel in control of their workload.
Improve customer service
Thanks to the benefits described above, employee productivity can also improve customer service. When employees work efficiently, they’re better equipped to provide outstanding customer experiences. When different teams are in sync, processes run more smoothly — and there’s less risk of customer neglect. This also results in proactive and immediate support for all customers.
Create healthier work relationships
When everyone in the organization is productive and properly coordinated, processes run much more smoothly. A good work relationship requires trust, respect, self-awareness, inclusion and open communication. When everyone sees one another as productive this can lead to improved work relationships overall.
How is employee productivity changing?
In light of all the changes that came with the rise of remote work, it’s natural for managers to wonder how their team’s productivity compares to what it looked like back when everyone was in the office. Common questions include:
- Are my team members operating more efficiently, less efficiently or the same?
- How can I support increasingly flexible remote work environments without compromising productivity levels?
- Are processes followed even though I can’t see them?
- How much of the workday is actually productive time, and how much is responding to Slack message after Slack message?
These are all great questions to ask in the current landscape, and they’re more common than you might think. The only way to answer them — without educated guessing — is to use workforce analytics. Once you understand how people work, it’s much easier to determine what true productivity looks like at your company so you can measure it accurately.
What factors impact employee productivity?
Factors like culture, environment, training and technology play a significant role in employee productivity and, in turn, business results.
An estimated 86% of business leaders believe company culture boosts productivity — with good reason. Research shows that positive work environments, where people feel valued and appreciated, can have a big impact on employee engagement and morale. In contrast, cut-throat cultures tend to rack up costs associated with healthcare expenses, disengagement and a general lack of loyalty, all of which can cost organizations a lot of money in the long run.
Whether employees work in the office or from home, factors like temperature, poor lighting and even hydration can impact productivity. How is your organization supporting employees to improve their environment at home or in the workplace?
When your team is made up of a group of people of different backgrounds, it allows your organization to benefit from a variety of perspectives and skill sets. Does your workplace foster diversity and inclusion?
One survey found that 64% of organizations say the skill gap is holding their business back. Do your employees receive a good onboarding experience? Do they know how to perform their jobs, or do they need additional training to keep their skills up to date?
Health and wellness
Employees who are physically and mentally healthy are more likely to perform well than employees who are struggling. While the latter might show up, they’re not positioned to do their best work. Instead of producing work at a profitable rate, they struggle in silence through illness or injury to do what they can — a phenomenon known as “presenteeism” that causes productivity to suffer. How is your organization prioritizing employee well-being?
Equipment and technology
The proper equipment and technology can empower employees to make the most out of their time and work more efficiently. Do your employees have access to the right equipment? Have they been trained on how to use it?
When is employee productivity at its best?
Workforce productivity is at its best when three things happen:
- People are empowered at an individual level
- Processes and workflows are optimized at higher levels
- Technology is maximized in your working environment
Each of these components is equally important. One of the most common misconceptions about employee productivity — especially in the discourse surrounding remote work — is that your team’s productivity is entirely dependent on the motivation and drive of each individual employee. In reality, employee satisfaction, engagement and productivity all go hand-in-hand. For this reason, it’s important to ensure your workflows allow employees to do their best work and that your technology empowers teams to work efficiently. This is critical to boost employee morale and productivity.
How to measure employee productivity
Understanding and measuring employee productivity is the first step to making better investment decisions. Why? Because when you’re armed with the right visibility and insights, employers and employees can work better together to realize their full potential.
One of the most widely-used ways of measuring the success of an organization, a team or an employee is using the classic employee productivity formula. The idea is to compare input to output. The classic productivity formula is:
output unit / input unit = productivity
This is just the baseline, however. Each business must look deeper to determine the best method for measuring employee productivity. Here are some of the most common:
Quantitative methods can be simple and are based on measuring productivity by the number of products an employee makes during a particular period of time. In the quantitative method, businesses need to know their normal operational output, average it and then divide it by the total number of employees in their entire business or in a certain department. Once you have this number, you can use it as a basis for weighing your employees’ productivity levels. When a business uses this method they must include uncontrollable factors like training and equipment or material waiting times. Businesses calculate productivity by using productivity software, revealing the number of products an employee makes in a given time period. It measures the output by volume or quantity of products, or by the financial value of products produced in a given period.
The ‘objectives’ method evaluates productivity based on how well employees are able to meet set objectives. It requires solid data to measure performance — not general impressions or assumptions, but predefined metrics that can be automatically and consistently tracked. For businesses to objectively measure productivity this way, they need a baseline set for each role in the company. Leaders must set clear and individual goals for employees, and provide all the resources and tools needed to complete these goals. When a business measures its employees’ work efforts objectively and communicates this information correctly, it’s possible to improve both productivity and profitability.
For many companies, daily stand-up meetings have become an essential way to help teams unite and prioritize work. Different teams throughout the company will have organized stand-ups so that each employee can give an update on the tasks they’re currently working on, along with completed and upcoming projects. While this approach may not be best for every team, one advantage of the stand-up meeting is transparency. If you have a distributed team, it can be a way to keep everyone accountable and on track to meet goals and deadlines. The key is to cap it at a set time, ideally 15 minutes, so people still have plenty of time to get into the state of flow that’s essential for productivity.
To measure service productivity, businesses need to know how to quantify service output and measure productivity as accurately as possible. One way to do this is to keep a log of how many tasks are done or how many customers are served in a given amount of time. You can also take note of how fast service delivery is or how satisfied your customers are.
Many organizations believe that rather than counting the hours spent at the office, leaders should calculate employee productivity by measuring the number of tasks they complete. Tracking tasks can sometimes be more difficult than simply tracking hours worked, but it can also be a more accurate indicator of output.
Tracking an employee’s hours is a typical technique of measuring productivity because hours can be tracked easily. Time tracking software allows employees to record time spent on tasks or projects. Leaders can then use this information to figure out where an employee’s individual strengths and weaknesses lie and delegate assignments accordingly.
No matter which solution you choose to use, the key lies in finding the right software. There are solutions that make productivity management and measurement much easier and more efficient. This kind of software can help businesses spot patterns across employees, processes and technology — ones that can be optimized to fuel productivity.
5 strategies for managing employee productivity
As a manager or business owner, you know that employee productivity is key to success. By taking steps to boost productivity, you’ll not only help increase profits but also contribute to a better work environment. But unfortunately, it’s not always easy to translate long-term productivity goals into day-to-day management and support. So what can you do to manage employee productivity on a daily basis? Here are five simple strategies:
1. Focus on the big picture
First, it’s important to remember that productivity is not just about completing tasks. It’s also about the quality of work that’s produced. For example, if an employee completes a task quickly but makes numerous errors, this can actually decrease overall productivity because the work will need to be redone or corrected. So when managing productivity on a daily basis, make sure to take a step back and look at the long-term implications every once in a while.
2. Keep the lines of communication open
Managers must communicate policies and goals effectively to ensure everyone’s on the same page. But that’s just the first step. You also need to be available for questions and open to providing guidance as needed. When employees feel heard and respected, the result is a more positive work environment and greater productivity.
3. Create feedback loops
Setting clear goals is just one part of the equation. Managers must also track progress and provide timely feedback to ensure employees understand how they’re performing relative to expectations. By monitoring progress, you can identify areas where employees may need additional support or training.
4. Evaluate obstacles
There’s a wide range of factors that can impact employee productivity. Distracting alerts, unfocused meetings, multi-tasking and time-consuming manual tasks can all eat up valuable hours. By understanding these potential obstacles, you can take steps to address them and keep productivity levels high.
5. Focus on engagement
Another factor that greatly impacts productivity is employee engagement. When employees feel engaged and invested in work, they’re more likely to be productive. Managers can help boost engagement by offering professional development opportunities, recognizing and rewarding good work and ensuring employees have easy access to the right tools.
Finally, it’s worth noting that employee productivity is not solely the responsibility of each individual employee. Managers and leaders play a crucial role in fostering a productive work environment. By providing adequate resources and support, you can help people reach their full potential and achieve higher levels of productivity. In the following section, we’ll discuss ways for managers to improve productivity rather than simply manage it on a day-to day-basis.
9 ways to increase employee productivity
1. Give people some downtime
The savviest business leaders know that downtime is a key part of maintaining an achievement-oriented culture. The right amount of downtime can increase productivity rather than reduce it. And it doesn’t have to mean a major shift. Something as simple as encouraging vacations, lunch breaks and technology downtime can go a long way in ensuring people get the rest they need to perform their best.
2. Promote self-care and health
Encouraging employees to take care of themselves is vital to workforce productivity. Workplace health programs that improve employee health by reducing, preventing or controlling illness can positively improve worker productivity. Productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year. Promoting self-care can go a long way when it comes to improving employee productivity overall.
3. Create friendly competition
Bringing competition into the office can increase engagement, collaboration and productivity. By developing challenges or tasks that require teamwork, team members are given the opportunity to turn to each other as a resource. Friendly competition can help light a fire under the team. Plus, in an effort to be more productive, employees find ways to be more efficient in their work processes.
4. Incentivize employees
Rewarding employees for a job well done can inspire them to work even harder and be more productive. Research has found that when incentive programs are first offered for completing a task, performance increases 15%. Ask people to persist toward a goal by offering longer-term incentives, and performance goes up 27%. In other words: Recognition, rewards, bonuses and fun gifts can all be a great way to motivate employees to do their best work.
5. Improve workplace conditions
Temperature, air quality, lighting and noise conditions all affect work concentration and productivity. Improving the physical office environment can have a significant impact on productivity. When employees become more satisfied with their physical environment, they’re more likely to produce better work outcomes. This also applies to work-from-home setups. Even a small work-from-home stipend can help employees add plants, natural lights and artwork to a space so they’re more comfortable and productive.
6. Optimize meetings and emails
Today’s digital employees often spend a significant amount of time responding to pings and attending meetings during the day, and answering emails at night. The constant flow can cause extra stress and increase anxiety — which ultimately causes a decrease in performance and productivity. When organizations find ways to optimize these daily work tasks, they can improve productivity because their employees are able to focus on the main priorities with little interruption.
7. Provide better employee training
How companies onboard their new employees sets the tone for long-term productivity. Properly training new employees gets them off on the right foot by giving them a good sense of business and job expectations. Ongoing employee training is also important because it helps cultivate talent from within a business. By retraining employees on current skills, you can increase productivity by preventing small, basic mistakes. When employees have a mastery of the knowledge and skills for their job this increases their satisfaction and confidence and, as a result, productivity.
8. Allow flexible schedules
Different people are more productive at different times of the day. That means a traditional 9 to 5 work day may not be what’s best for each employee. And for digital workers especially, flexibility is key to productivity. In one recent Gartner survey, four in 10 workers said flexible working hours helped them achieve greater productivity, and 30% said that less or no time commuting enabled them to be more productive.
9. Offer opportunities for career development
Effective career development programs and strategies can not only help reduce turnover but also increase productivity and profits. Employees who pursue professional development in their careers tend to have higher productivity and job satisfaction. Some ways organizations can support employee career development include courses, workshops, seminars, individual coaching, shadowing or increasing responsibilities. Offering these opportunities can give employees additional skills that allow them to improve their efficiency and productivity.
How to create a culture where employee productivity can thrive
Employee productivity isn’t a one-off project. And it’s not something managers should only look into when they suspect their team’s productivity levels have suffered. To truly empower your employees and set them up for success, you have to strive for a culture where productivity thrives.
That means creating an environment where employee productivity naturally flourishes, people feel engaged and empowered, and managers proactively seek out opportunities to help their teams thrive. Here’s how to create this culture in your enterprise:
Regularly reinforce your vision
Productivity means a lot of different things to a lot of different people, and your employees must be clear on what they’re asked to work toward. State your department’s employee productivity goals clearly and often. When employees understand and believe in your vision, they’re more likely to stay committed.
Talk openly about employee productivity
Some team members might associate efforts to increase employee productivity with time tracking or monitoring. It’s your job to fight back against these notions! Start an honest conversation about what everyone gains from measuring productivity regularly, and encourage your team to voice their concerns freely.
Set employee productivity goals
Without defined goals, your efforts to increase employee productivity could lose valuable momentum. Use workplace productivity analytics to help you establish productivity metrics first, then use those same metrics to inform your goals and think about how you can go about achieving them.
Identify areas where friction exists and take steps to address roadblocks
All it takes is one distraction to undo an hour of hard work. Notifications, email alerts and excessive multitasking eat away at your team’s productive time. Check in with your employees to talk about any points of friction that prevent them from staying on task and ask them what kind of support they need.
Encourage ownership of individual work and productivity levels
Workforce productivity is about giving employees the tools they need to be successful, not blaming employees for how they spend their work hours. Praise productive employees for their effective time management and tell them to keep up the great work. If there’s room for improvement when it comes to an employee’s productivity, empower and encourage them to view their own productivity levels as a baseline from which to grow.
It’s important your focus is not on simply increasing overall productivity, but also on improving employee engagement so your team members are more satisfied at work and, in turn, naturally work more productively. Productivity technology — particularly workforce analytics software — is one of the best ways to achieve this, though it’s only one component of a larger cultural shift. With technology that focuses on employee productivity, get data-driven insights into employee engagement, workloads (including potential burnout risks) and more. You can then leverage that real-time data in numerous ways — from redistributing workloads and reassessing meetings to giving recognition to employees whose efforts may otherwise go unnoticed.
Track, manage, and increase employee productivity with ActivTrak
At ActivTrak, we believe the future of work is all about open communication, transparency and inspiring change from the top down. This is particularly true when it comes to promoting and increasing employee productivity to ensure your entire team feels supported and empowered to succeed.
In fact, this is the very philosophy behind our workforce analytics software. We equip business leaders and employees with data that reveals where, when and how people work best. So even the most complex businesses with multiple definitions of employee productivity can work purposefully toward productivity goals. Request a demo to get started today.