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The complete guide to employee productivity

What is employee productivity and how do you measure? Use this complete guide to improve employee productivity across your frontline, remote and hybrid teams.

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With shifts in working patterns over the past couple of years, maintaining employee productivity has seemed like an uphill battle for many employers!

The good news: your employees genuinely want to do good work. If you provide them with the right tools, environment and support, you’ll get great performance in return. 

The slightly-less-than-good-news: you need to do this amidst ongoing uncertainty around COVID and potentially figure out the ramifications of permanent hybrid and remote working arrangements. 

This isn’t always easy – but it is doable. Gallup reports that it recorded its highest ever percentage of engaged employees in 2021. Given the links between employee productivity and engagement, this is a really solid starting point for your efforts. 

This 101 guide will help you understand a little more about employee productivity, how to increase it and its ties with employee engagement

What is employee productivity? 

‘Employee productivity’ is a measure of performance which tracks the amount of output each employee creates per unit of work. 

If that sounds a little fiddly to you…you’re absolutely right. 

Unlike ‘workforce productivity’ (also known as ‘labor productivity’) which measures the output of your workforce as a whole, employee productivity is a completely individual measure. 

What does that mean? 

Firstly, it’s more difficult to define. Each of your employees plays a vital role in the success of your business. What constitutes a ‘unit of productive output’ for your marketing team? What about your frontline retail staff or your drivers?  

Secondly, it’s more difficult to measure. You can measure the output of your workforce as a whole relatively easily. Because not every employee will work in a position with an easily definable output, you’ll need to seriously consider how to adjust your approach for different positions in your organization. 

How to improve employee productivity 

Investopedia identifies three key factors that increase labor productivity: 

  • Physical capital
  • Technological progress
  • Human capital development

We think that exactly the same applies when you’re trying to increase employee productivity. After all, the output from each of your employees adds up to the output of your business as a whole. Employee productivity is the individual building block of organizational success. 

‘Technological advancement’ feels particularly important with the drastic rise in hybrid and remote working caused by the COVID-19 pandemic. A 2021 study found that home workers dealt with a gruelling four tech problems a week on average, whilst 24% said they didn’t have adequate tools to do their job. 

Equally, whilst tech is a major factor in keeping employees productive, it’s not a cure-all. You can invest in all of the latest collaboration tools – AI note-taking tools, augmented reality conferencing solutions, the rest – but it won’t make a difference if your workforce is directionless, confused, and unmotivated.  

Here are a few steps you can take to improve employee productivity – both tech and people-focused. 

Set clear goals, expectations and priorities

Having solid goals to work towards helps employees remain focused and productive. If they have a clear idea of what to expect, they can figure out how to meet those expectations and prioritize accordingly. 

Set deadlines, but contextualize them. “I need this done by Wednesday lunchtime” comes across as needlessly authoritarian and creates stress for the sake of it. “I need this by Wednesday lunchtime so that we can pass onto the production team in time for our to-market target” draws your employees in by emphasizing how important their work is to the wider organization. 

Invest in your workforce

In the USA, there are now 5 million more unfilled job vacancies than there are unemployed workers. Getting the most from your existing workforce has never been more important. 

Invest time and capital building your workforce’s skills. Offering training – whether in person or e-learning – both allows your employees to do their job more effectively and shows that you’re invested in their long-term career development. Employees work harder and get more done as a result. 

Work on building employee trust

Can you trust your direct report to follow instructions and complete tasks on time? 

It’s a valid question, but it’s really only half of the equation. 

Can they trust you to support them in their goals, be transparent about company developments, communicate effectively and respect their time (such as by approving leave requests promptly without follow up)?

Trust in any relationship goes both ways. If you uphold your end of the bargain with support and respect, you’ll see increased morale and productivity as a result. 

Identify issues first. Then find the tech that helps

Since the pandemic began, the market for productivity apps & tools has exploded. It’s tempting if you’ve seen productivity levels dropping, to dive right in and rectify the problem immediately. 

Take a step back. Before you commit to anything, work out which issues are currently barriers to employee productivity and look for tech solutions for those specific problems

For example, virtual kanban boards like Trello can make managing large, desk-based departments much easier with notifications and deadline reminders, immediate visibility into task completion and an easy-to-follow visual layout. Would it offer the same benefits to rapid-fire ER healthcare teams, whose work priorities and tasks shift rapidly throughout the day? 

Employee engagement and productivity

Setting clear goals, investing in your workforce, building employee trust and providing time-saving tech solutions all increase employee productivity. 

Why? 

It’s because they also increase employee engagement – and engaged employees are 17% more productive than non-engaged employees. Understanding how these two concepts are linked is essential in building employee productivity in the long term.   

‘Employee engagement’ has been a fundamental concept in people strategy circles for the past decade. There’s no absolute definition, but we like global advisory firm Gallup’s for its simplicity and directness: 

“Employee engagement as the involvement and enthusiasm of employees in their work and workplace.”

If we had to simplify it even more: employee engagement measures how much your employees buy into your organization. Do they support your organization’s goals, see their work as meaningful and see their career developing at your business over time? Or, are they disinterested, doing the bare minimum and about to jump ship?

Highly engaged teams are more productive. If employees feel involved, respected and needed in the workplace, they innovate more, collaborate willingly and are significantly more motivated – and they’re much less likely to leave, which your hiring budget will thank you for. 

How to measure employee productivity

As we discussed above, there isn’t a catch-all approach to employee productivity measurement 

As such, your line managers will need to be involved in measuring employee productivity from step one, setting goals and analyzing performance from their direct reports to find effective ways to motivate each individual employee. 

Here are a few tools your managers can use to get started. 

Percentage of goals met

If you offer clear objectives and goals for each employee, check in on how effectively they’re completing these. Measuring the percentage of goals met gives a good baseline understanding of overall employee performance.  

Benchmarks and targets

Businesses now hold more past performance data than ever before. Use this data to set realistic targets and benchmarks for employees, taking into account seasonality and external conditions. 

Revenue per employee

How much revenue did you make last quarter? Divide it by the number of employees to give an average of revenue generated per hire. 

Employee productivity software: how to track employee productivity 

It isn’t easy to track employee productivity at the best of times. With the increase in home-working and virtual collaboration, it’s now even harder. 

Employee productivity tracking software is a great way to get insights into how your team is performing, particularly in remote and hybrid environments. 

The key to success here is not to use tracking software completely negatively. It’s as effective at identifying the habits of top performers (and allowing you to reward and share them) as it is for picking up potentially disengaged employees. 

And, when you do use it to identify which employees are lagging behind, you can target coaching to their specific needs to address any potential weak spots and turn their performance around. 

When you’re looking for employee tracking software, these features are must-haves: 

  • Timesheets 
  • Time tracking
  • Attendance management
  • Task management
  • Location tracking for frontline mobile employees
  • Alerts for protocol breaches
  • Browser history tracking

What makes it all worthwhile?

You might have figured out by now that increasing employee productivity will need time, effort and potentially investment on your part. 

What does this get you, in the long term? 

The simple answer is: more revenue. Two welcome words for any key decision-maker!

Engaged, productive employees care more and put in more effort as a result. This gives more scope to innovate, more drive to provide great service and better performance across the business in general. 

The effort you put into improving employee productivity will more than make its money back as remote and hybrid works become ever more established. If you haven’t already, now’s the perfect time to start.