So what is employee productivity?  Employee productivity would seem to be as simple as how much an employee produces, but what about the big picture.  Let’s take a look at a fictitious company, Hard Numbers Corporation.  They have decided to measure employee productivity as x widgets per employee hour.  Since they started focusing on employee productivity they have been able to increase average widgets per employee hour from 80 to 92, a 15% improvement.  The problem is that they have only experienced a slight decrease in costs and their sales are flat.

Now lets take a look at their competitor, Highly Engaged Corporation, they also decided to measure employee productivity.  They took a more balanced and holistic look at employee productivity. 

They chose the following metrics to track employee productivity:

Revenue / Employee
Operating Margin / Employee
Customer Retention Rate

They then chose to focus on engaging their employees.  Hard Numbers Corporation chose to focus on widgets per hour resulting in their quality declining and their client’s becoming dissatisfied and turning to other organizations for their needs.  High Engaged Corporation focused on employee engagement and as a result they experienced increased sales resulting in higher Revenue per employee.  They also experienced lower costs increasing their operating margin as employees found better ways to make widgets.  The customers really appreciated dealing with the employees of Highly Engaged Corporation as the employees really took an interest in them and besides the product quality was great.

Now you may be saying to yourself, nice story but I doubt it works like that.  Let’s take a look at some organizations that have focused on employee engagement and let you be the judge.  Here are fourteen organizations that focus on employee engagement and as a result are leaders in their fields.

For a free no obligation information session to:

1. Understand what employee engagement is and how it impacts your business
2. Learn how to measure and track employee engagement using an employee engagement survey
3. Understand how to increase employee engagement through the employee engagement process

Then contact…

EngageYourEmployees.com today at (519)858-1820 or 1-888-472-9767

¹ Jack Welch, “A Healthy Company?”

Business Week Magazine, (May, 2006).

More on the impact of employee productivity...... read this article Economic Downturn and the Impact on Productivity

With the prolonged downturn in the economy, job losses at high levels and unemployment nearing ten percent,is the war for talent over? Some may think with unemployment levels at record highs that there is an abundance of talent. Talent is a scarce resource, period. Let’s take a look at what happens in organizations during a downturn.  Before we do that lets look at the talent composition of firms.

As organizations grow their ability to fill all positions with top talent becomes increasingly more difficult. This results in a drop in the percentage of high performing employees to the total employee population with a resulting talent gap. Many organizations have adapted by introducing rules and policies to control their employees to make up for the talent gap.

As organizations grow and introduce structure, rules and policies to improve quality they end up boxing in the talent they hire. On the positive side it makes recruiting for the positions easier because you are hiring to the lowest common denominator. The problem is that you are limiting your talent, putting a governor on your people and this has to detrimental outcomes.

The first outcome is that you create an organization that is trained to think inside the box and when times are good and you have a stable business the results are adequate. The wrench comes when things change in your business and in order to survive you need employees who are going to think outside of the box with the resulting evolution of your business. What would have happened if United Parcel Service had continued along their original business path of delivering telegraphs? UPS evolved from delivering telegraphs, to delivering goods from retail stores to shoppers, to courier service to a transportation and logistics company. Many companies grow and then fail to evolve and the result their demise.

The second outcome is just as scary.

You do a great job attracting talent and then you put them into the box. What do you think happens? Yes, initially the talent performs and exceeds expectations and may get promoted extending the retention of the talent. At some point the promotions will not keep up to the talent and the talent will get dissatisfied and leave.So although the structure helps you short term by creating a smooth running organization it lends itself to mediocrity as you put restrictions on your people. It may also cause a talent retention problem.

Now getting back to the question of what happens in a downturn. Organizations start to shed employees and you can guess who goes first. That’s right the lowest performing employees. So although there is an increase the number of unemployed candidates, talent is still a scarce resource. Even in an economic downturn or a business slump we need to continue to build and strengthen our talent bench.

The war for talent is alive and well. So how do we win this war? There is one key element we need to improve our odds.

We need to increase employee engagement. Really there are two key components to employee engagement. The first is leadership, not management. We need to create a culture and vision that inspires our team. The second is our work environment. We need to rethink traditional methods of confining employees inside a box and instead take off the constraints and allow our talent to utilize and maximize their strengths. As we engage employees and create an environment that allows them to contribute, you will see two results. One is that you will retain your talent and the second is your business results will improve.

I also want to address the issue of compensation. Compensation will attract employees and is an important part of the strategy, but compensation will not retain talent. Talent is motivated and wants to contribute, if you prevent that through unnecessary structure, your talent will leave.

So to recap, the war for talent is on. To win the war we need to evolve our leadership practices and reinvent our work environments. For those ready to challenge status quo, success and the win are around the corner.

Also read : Why Bother with Employee Engagement?