Â
Marc Benioff, CEO of Salesforce, recently caused controversy when he asked for assistance in determining why the company's newest hires aren't producing enough in a Slack message to staff members. The productivity problem at the IT behemoth is not unique.
Inflation, decreasing GDP, and the biggest decline in worker productivity in four decades are all issues that employers must contend with. According to Nela Richardson, chief economist at ADP, during a recent Workforce Executive Council Town Hall on CNBC, this is the first year since 1983 that has seen three consecutive quarters of year-over-year declines in average productivity per worker.
Simply put, more labor is being done, but less is being produced.
According to Diane Swonk, chief economist at KPMG, a lot of the difference can be attributed to many factors, including pre-pandemic events. People are first worn out and stressed, which contributes to increased burnout. People worked more when there was no forced separation between work and home due to the pandemic.
Workers are suffering as a result of the soaring cost of living. The number of North American workers who are financially stressed has increased by 61% in the past year, according to data from the human capital management software company Ceridian. This is the greatest level of financial stress since 2008. The company estimates that such pervasive financial anxiety costs North American employers $664 billion in lost productivity annually.
As much as remote and hybrid work have provided employees with long-desired autonomy and flexibility, Swonk stated that not being physically present can affect how well-rounded and innovative a team is able to be.
Last but not least, renovations during the early 2000s already benefited from increases in labor productivity. According to Swonk, the majority of the innovation that has since occurred has been contained in the tech industry alone rather than being dispersed throughout the entire economy.
Worker engagement and job performance
Swonk recommended putting an emphasis on engagement for businesses looking to increase employee productivity. An important factor in determining engagement is if employees believe their work to be meaningful and satisfying. Chief people officers are quite familiar with this area, yet they sometimes equate it with employee satisfaction or pleasure.
Contrary to happiness, engagement is not correlated with any one emotion or feeling. It aims to produce a better business result. There is a significant correlation between engagement and performance outcomes including retention, productivity, and profitability, according to a recent Gallup analysis of 112,312 business units in 96 countries.
According to Swonk, greater communication is one way to increase engagement. She stated, "I know businesses realize the link between engagement and productivity, but for a very long time, people were treated as commodities." Employers today need to pay closer attention to the demands of workers in a competitive labor market. "Companies don't ask employees what they want enough; they guess what they want and guess incorrectly," she claimed.
She recalls a client who desired to provide his low-wage employees with the opportunity to advance in their careers in 2019. Instead, he discovered that his employees were departing for positions elsewhere that paid 50 cents more per hour. He was very perplexed because he was giving them this wonderful chance to advance, but they were rejecting him, Swonk added.
This manager didn't realize that his staff needed to make the most of their pay in order to pay for food and housing for the entire week, not just their professional income. If he had first questioned his employees, Swonk continued, "He would have known that."
