The productivity puzzle has left economists, politicians and business leaders baffled, but part of the solution could be very simple – keeping the workforce happy
Since the financial crisis there has been a rise in the number of people in work in the UK, but productivity has remained stubbornly low, lagging behind the G7 average and acting as a drag on economic growth. More people are working longer hours to produce the same amount, which shows that while Brits are not afraid of hard work, they need to become more efficient if the economy is to thrive.
Chancellor Philip Hammond has predicted that improving productivity by just 1 per cent a year would add £250 billion to the economy over the next decade. Possible solutions, such as investment in infrastructure and equipment, come with a heavy financial cost and may take years to have an impact.
One answer, requiring a relatively small investment and showing almost immediate benefits, is to make workers feel valued and wanted.
Improving employee engagement can have a dramatic effect on the performance of individual workers and of the whole organisation, says Neil Pickering, industry and customer insight manager at workforce management technology company Kronos.
“Engaged employees deliver greater productivity and better customer service – a win-win for the organisation and their customers. One element for improving engagement is building trust, and trust is developed when business managers have visibility into the work and performance of their employees.
“This is the value that workforce management solutions deliver – greater visibility to help managers make the right decision, process automation to reduce administrative cost, and giving managers more time to support and mentor their employees,” explains Mr Pickering.
Although pay is important, money isn’t everything. Research by Kronos shows that pay ranks tenth out of eleven reasons for considering leaving a job. Number one is feeling undervalued.
Studies show that what workers really want is a better work-life balance, clarity and flexibility about shift patterns and working hours, and better training to equip them with the skills to perform well.
Getting it wrong leads to a demotivated workforce, absenteeism, increased stress, high staff turnover, difficulty recruiting, staff shortages, possible litigation and lower productivity.
But organisations that get it right see the benefits of an engaged and happy workforce through better attendance, lower staff turnover and a willingness to go above and beyond, resulting in improved customer service and productivity.
Offering employees a greater say in their work-life balance is undoubtedly a strong factor in increasing both engagement and productivity
For instance, using an automated time and attendance system reduces the risk of payroll errors, which are frustrating for staff and costly in time and money for businesses to correct, and cuts the administrative burden on human resources and payroll departments.
Similarly, providing a self-service option via mobile devices or terminals to enable holiday bookings, shift swaps, reviewing timecards, viewing work schedules, checking holiday balance and overtime worked not only empowers workers, but cuts down on the administrative burden.
Mr Pickering adds: “Offering employees a greater say in their work-life balance is undoubtedly a strong factor in increasing both engagement and productivity.”
Kronos works with client companies across a broad range of industries including manufacturing, logistics, distribution, transportation, contract services, hospitality, retail and healthcare.
The retail sector faces many challenges and delivering consistent service across all sales channels, and attracting, retaining and nurturing staff has never been more important for both bricks-and-mortar and online retailers.
Shop Direct, one of the UK’s largest digital retailers, with brands such Littlewoods.com and Very.co.uk, employs 4,000 staff at its fulfilment centres and has worked with Kronos on a series of programmes to improve employee engagement and the management of their workforce.
It says the partnership with Kronos to automate their workforce management processes has resulted in fewer payroll queries, better management of overtime and absence levels, which in turn has given it a more accurate snapshot of the workforce and capabilities. This enables the company to tailor resources to meet peaks and troughs in customer demand so staff are not overstretched and orders are not delayed.
Hospitality is another industry where customer satisfaction is the number-one measure of performance, which in turn is directly related to having happy and motivated staff.
Hall & Woodhouse is one of the UK’s oldest family-owned brewers, producing Badger ales and running an estate of more than 200 pubs in the south of England.
It prides itself on its commitment to teamwork and turned to Kronos for help after realising that its manual processes for forecasting labour demand and scheduling staff were time consuming and often inaccurate. Working with Kronos, the company introduced an automated system for labour forecasting and scheduling, allowing pubs to accurately predict future demand and roster staff accordingly to meet customer requirements and ensure high levels of service.
Hall & Woodhouse says its sales have risen, costs have come down and the resulting improvement in productivity has saved the equivalent of £1 million, which can be reinvested in the business.
Companies and organisations are having to adapt rapidly to shifting trends in technology, the workforce and consumer demand, such as the rise of the so-called gig economy and zero-hours contracts, all of which are transforming the world of work.
Costs are under pressure from legislation, such as the national living wage, and the impact from the UK’s looming exit from the European Union.
Against this backdrop, effective workforce management and employee engagement have never been more important for employers and employees.
“Most people go to work to do their best. They want to earn money, but just as importantly feel valued and respected. Employers have a care of duty to do their best for their employees, creating an environment that is safe, happy, efficient and profitable, because with this comes job security,” says Mr Pickering.
“In this new world of work, organisations need to engage their employees through better communication, greater flexibility, and the delivery of tools and technology to make their working lives easier. Do this and they will drive greater levels of performance and profitability, which is what the UK desperately needs.”
There may be no easy answers to the productivity puzzle, but improving employee engagement is an important piece of the jigsaw.
For more information please visit www.kronos.co.uk