Why It’s Time To Start Talking About Workforce Productivity Again
The ESPN network is launched on cable television. Sony launches the Walkman. The first woman (Margaret Thatcher) is elected Prime Minister in the UK. These are just some of the major news events from 1979. Another notable event? U.S. workforce productivity hit a historic low.
Although we’ve made tremendous productivity gains over the last three decades, especially during the internet-fueled boom of the early 90’s, productivity has hit a snag again. For for the first time since 1979, U.S. productivity has fallen for three consecutive quarters according to recently released data from the U.S. Labor Department.
This puts the U.S. economy on track for its longest productivity slump since the era of stagflation (when high unemployment coincided with high inflation). Why all the huff about productivity you may be asking?
Well, for starters, productivity lies at the heart of economic progress. It’s one of the most important indicators used to measure the health and trajectory of the U.S. economy. It’s also a key factor in determining wages, prices, employment and overall economic output. Basically, everything that matters for a modern society.
A downturn in productivity growth in one year does not matter much because economies will go through ups and downs as technology changes, but a persistent decline is a much more serious prospect. Over time, persistently weak productivity would weigh on American living standards by restraining the economy’s ability to grow quickly and generate higher incomes. Again, kind of a big deal.
So surely you’d expect a topic of this magnitude would be garnering national attention. Surely it was one of the issues brought up by our eminently qualified presidential candidates during one of their 3 debates. Surely economists around the globe are convening to address an issue that has profound social and economic implications. Think again. Mostly crickets.
So, we took it upon ourselves to do something. It’s why we commissioned the “2016 Workforce Productivity Report” in partnership with KRC Research to understand how leading senior executives from around the country are thinking about productivity. How are they measuring it? How are they managing it? How are they trying to improve it?
The results illuminate some of the biggest trends around workforce management, labor automation and business transformation. They also shed light into why — and how — businesses are embracing new labor models and management tools to radically improve their productivity and drive meaningful growth.
And, at a time when labor costs are typically the largest expense in any company’s operating model, forward-thinking business leaders are laser focused on driving the highest possible return of that spend and turning their attention to the next big competitive differentiator: workforce productivity. Some of the highlights from the research include:
The Productivity Paradox
Most business leaders (82%) agree that productivity is one of the top indicators of financial success, but a majority (69%) say their companies are less productive than they should be.
Can’t Manage What You Can’t Measure
The most common way businesses are measuring this all-important metric: employee performance (67%), which is a subjective and qualitative measure that can’t be used to accurately represent how productive a company really is.
Embracing an Agile Workforce
An overwhelming of companies surveyed (96%) are using contract labor and 72% believe that the increase in specialized contract labor available on-demand is increasing their company’s productivity.
The study provides a fascinating look into the minds of today’s top execs and allows us to better understand how businesses are formulating modern strategies around workforce productivity to define their future competitiveness and thrive in a post-cloud world.
Our hope is that by shedding light on this increasingly important topic, we can encourage business leaders, economists, politicians and society as a whole, that it’s time to start talking about productivity again like it’s 1979.
To download the report, visit https://content.workmarket.com/2016-productivity-research/.