In businesses such as that of professional services, where the largest overheads are often salary costs, a few minor changes in employee and partner productivity can easily improve business value. But are firms actually applying such improvements to enhance their competitiveness?
Productivity in the UK
According to the latest figures from the Office for National Statistics, UK’s productivity growth statistics have considerably dropped, especially since the financial crisis.
With this data in mind, it is not surprising that the recent revelation that French workers accomplish as much in four working days as a British worker does in five, has gained the attention of many employers and employees alike. Businesses now realise that besides considering cost-cutting strategies to enhance profitability, improving productivity will boost operational efficiency and overall competitiveness leading to further increases in profits.
With Brexit in mind…
For many industries, Brexit will cause great turmoil and the financial and professional services sectors will not be immune from difficulties. Ensuring that businesses understand the regulatory impact of trading inside and outside of Europe has becoming increasingly important and will put them ahead should a no-deal Brexit occur. Additionally, exploring methods to increase productivity, investing in future-proofing technologies and advancing sales and marketing strategies, are recommended points of action.
In order to improve productivity, it is essential employers are sure it is being accurately measured. Chargeable time and resource utilisation are often used as productivity measures within the professional services sector. Step one for applying either of these measures is for the employer to calculate the total working time for each employee. The assumption that a fulltime employee works 37.5 hours per week, for 44 weeks of the year, allows for eight bank holidays, five weeks of holiday and takes into account absence due to sick leave, training and others. When using this data, employers are more likely to set realistic and attainable goals to increase chargeable time.
Once the firm’s productivity is correctly measured, employers should perform a firm-wide audit to determine any productivity pressure points. What an audit can do is identify possible pressure points impacting productivity could include: technology, morale and motivation, access to skills, infrastructure, health and wellbeing, remuneration and regulation. Depending on the firm’s structure and culture, some or all of these elements may require attention in order to optimise productivity.
For instance, analysing the firm’s people costs and skills base, could increase the employer’s awareness on whether jobs are being allocated to the right people and the demand for certain skills in the future. In turn, this would allow for better informed decision making when it comes to job cuts aimed to boost productivity.
Another common pressure point is associated with the lack of access to useful and timely data. In this case, to establish which areas are in need of improvement, a firm-wide audit of accounting and financial management processes is recommended. Before investing in technological changes or upgrades, employers should ask for professional advice on how to streamline their operational processes, as often relatively easy adjustments, such as electronic signatures and automatic time recording, can make a big difference.
A factor that is often overlooked when examining ways to increase productivity is that of poor transport infrastructure, which may have a significant impact on a worker’s wellbeing. Both productivity and attracting talented people can be negatively influenced by excessive commuting times or routes prone to disruption. To address these concerns and relieve pressure on those experiencing transport issues, flexible working arrangements, such as variable start and finish times and other benefits and rewards can be introduced.
Winning at productivity
Optimising productivity can add value to the business by significantly improving a firm’s resilience during challenging times. Besides boosting profits, adopting strategies to encourage productivity can achieve a better work-life balance and improved workplace morale. Less obvious benefits may include new demand-side opportunities, funded by resources that were previously tied up and are now available due to increased productivity.