Where has our productivity gone?

Australian businesses are not reaching their potential when it comes to productivity. We are lagging behind other OECD countries and our position is not improving. We are behind the US, UK, Brazil and France, to name just a few.

Several issues could be causing your business’s productivity to drop:

1. You are not sure how to measure your company’s productivity
2. You are unsure of the benefit of productivity (even if you could measure it)
3. You just don’t like numbers.

Would it be better to remain blissfully unaware of your productivity result and, more importantly, how to fix it? I don’t think so. If you could lift your productivity score by just 10%, it would make a significant impact on your business.

Let’s talk about how to measure employee productivity as a starting point – there are two ways:

  • Revenue/number of employees = revenue average per employee. For example, if you have revenue of $100k and ten employees then each employee is responsible for $10k of revenue.
  • Product/number of employees = number of products generated on average per employee. For example, if you produce 100,000 widgets and have ten employees then each employee is responsible for 10,000 widgets.
    Now, I’m almost sure I know the answer to this question, but would it be a bad idea to explore how you can create an increase in your company’s productivity?


Here are 10 ways you can increase your business’s productivity:

1. Strategy – ensure you have a clear strategy and a business plan to support it. I highly recommend the team at Leadership Counts.

2. Hire the best – hire high-performing employees – if you don’t have the best people, in the right job, at the right time, and in the right place, you will struggle.

3. Management by KPIs – what doesn’t get measured doesn’t get done.

4. Build a great culture – one that attracts the best employees to work for you and, importantly, stay with you.

5. Relentless execution – you need to do the ‘little things’ right – time, after time, after time.

6. Build, promote and protect your brand – your company and personal brand counts and you need to make sure that the market gets to know, love and trust you.

7. Performance Management – ensure that all your team are working to their full capacity. If not, their performance should be managed back up to the required level – otherwise, they should exit. Equally, you need to reward and recognise your top performers.

8. Exits – think about how individuals exit your business and consider building an Alumni program – these people can become clients, supporters or they may even return with a better skill set.

9. Engagement – build a highly engaged team. Engagement is the measure of ‘discretionary effort’ – when you have engagement levels of 75% or more, versus 25%, you typically see 21% more productivity and 20% more profitability.

10. Communication – the vast majority of businesses we see are not good internal communicators – they don’t have a communication strategy. The result is that your employees are left ‘in the dark’. You want all your employees to be very clear about the goals, the results and the end game. That way they can help you reach your desired destination.