Improving productivity in the UK: focusing on the workforce

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Written by Brenda Morris on 27 May 2015 in Opinion
Opinion

UK businesses need to consider a more strategic investment in workforce management technologies, Brenda Morris says 

Mark Carney, the governor for the Bank of England, recently announced that productivity in the UK is 16 per cent below its pre-crisis trend, demonstrating a large shortfall. The figures reinforced that the UK is often known to be less productive than other similar developed countries. The ‘productivity gap’, the term which many refer to this as, poses a significant challenge to UK organisations as they face the threat of increased global competition.

Beyond global competition, businesses are contending with thinner margins, economic pressure, higher wage demands and increasing legislation around working hours and holiday pay entitlement. All factors that are driving organisations to find new ways to reduce costs, increase productivity and improve compliance.

When staff costs represent the largest controllable expense to your business, optimising the use of labour is essential if organisations are to remain competitive and improve productivity. The evidence shows this is exactly what many are doing. A recent report that surveyed businesses with an existing workforce management strategy, finds that UK organisations are increasingly embracing technology that helps unburden employees in order to better manage productivity. The Productivity: Managing and Measuring a Workforce report found that nearly three-quarters (72 per cent) of organisations utilise automated absence/leave management solutions and 71 per cent have already automated labour forecasting. However, only 64 per cent of UK businesses have automated the time and attendance functions of their workforce. Crucially, those businesses that have integrated their workforce management solutions report an increase in productivity ranging from five per cent to 20 per cent.

Although the survey has highlighted how businesses have already started to benefit from automating core workforce management processes, last week’s announcement shows there are further improvements that need to be made. Businesses of all sizes need to use technology across all areas of the business in order to create a more engaging, motivating work environment and in turn deliver increased productivity. With this in mind, here’s 3 steps they should be taking:

  1. Shrink administrative overheads: How much time do supervisors and HR managers lose every week responding to admin queries from employees? The number of hours is probably higher than it should be, which isn’t the most productive use of their time. Instead, organisations should let employees get the information they want themselves. Providing online systems which are easily accessible and provide a central point for workers to view their payroll data, working hours and holiday accruals is a good place to start. Automating these HR functions empowers workers to be more efficient with administrative tasks. The survey also found that 31% of organisations state that automating time and attendance processes resulted in an improvement in profit per FTE and Service Level Agreement (SLA) levels because managers are provided with insight into where labour is being consumed in real time.

2.Controlling the cost of employee absence: Did you know that the annual median cost of employee absence, per employee, is £595? This number, according to the CIPD 2013 Annual Absence Management Survey, represents the cost of unscheduled absences, typically excluding the indirect costs of replacement labour, overtime costs, reduced productivity and administration. In fact, as illustrated in the same study, the true cost can easily be 2 or 3 times as much, and more importantly between 21 per cent and 26 per cent is believed to be non-genuine absences. By accurately tracking absences and the trickle-down effect they have on the entire business, using an absence management system to provide visibility and forecasting, organisations can improve productivity and minimise compliance risk, while addressing issues that may increase the rates of absence to improve team cohesiveness and morale.

3.Use overtime the right way: Overtime, if used in the right way, can flex your workforce to increase capacity as needed in order to meet customer demand and SLAs. Sometimes, however, the use of overtime can mask problems that, if left undiscovered and unchecked, can cause ongoing damage to productivity and competitiveness. In some cases, overtime is being used to make up for high levels of absenteeism, poor visibility of customer demand, low productivity or little visibility into employee workload. When managers don’t have sufficient insight and controls in place to use overtime in the most efficient and appropriate manner misuse can occur, and some managers and employees may treat it like a “benefit”. Organisations should take measures to ensure that they are tracking overtime and doing so in an accurate and reliable way. By using an automated system, for example, they can ensure data of employee absences is being tracked and stored in real time. 

With productivity in the limelight, UK businesses need to consider a more strategic investment in workforce management technologies, focusing effort on people and people-related processes in order to understand where there’s waste and where there might be opportunities to improve. Those organisations that have a well-balanced workforce, managed by a fit-for purpose workforce management system, should quickly be able to see a direct correlation between higher productivity and employee engagement levels.  

 

About the author

Brenda Morris is general manager UK at Kronos

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