Why Does Business Productivity Matter so Much?

Published on:

January 20, 2022

A man teaching a group of students on business productivity

COVID-19 has had an impact on worker productivity with many businesses struggling to survive. But there has been a decline in productivity growth in the UK for decades. In fact, the pandemic has highlighted that workers are willing to adopt new strategies and innovative new ways of working. A report from Peldon Rose, “The Office of the Future”, found that 35% of business leaders felt that workplace productivity had improved during the pandemic.

Here's why business productivity matters

Productivity is one of the primary driving forces behind business success, yet, the UK has witnessed a sustained period of poor productivity growth. In fact, the UK’s level of productivity is over 20% lower than other advanced nations including France, Germany and the US.

As Paul Krugman, the Nobel Prize winning economist, said “Productivity isn't everything, but, in the long run, it is almost everything.”.

Increasing business productivity has a shared benefit for everyone.

  • Companies benefit from business growth and higher profit margins.
  • Employees have a better working environment, more disposable income and improved career opportunities.
  • And, the government benefits from higher business tax and a stronger economy.
  • We all benefit, as the country becomes richer, the standard of living rises and generates more money to be spent on health, education and welfare.

Improving productivity is about working smarter, not harder.

  • Working even harder only lowers productivity through tiredness, mistakes and rework.
  • Low levels of productivity can quickly become a vicious circle. Underpaid, undervalued and underqualified staff have low job satisfaction and therefore, perform poorly.
  • Bosses are then producing and selling less due to poor productivity and, as a result, invest less in their employees which further undermines productivity levels.

Important skills needed to improve business productivity

  • It is vital that a company’s management team possess excellent communication skills, know how to lead, delegate and most importantly motivate staff.
  • Motivated, engaged and qualified staff take control of their own workload and contribute valuable ideas to the business which, in turn, increases workplace productivity.
  • Sensible HR decisions and ongoing training are essential as employees who are underqualified for their role lack the confidence and skills for optimal performance.

Productive staff produce the same amount of work in less time which can give your business a significant advantage over your competitors.

Businesses can produce larger quantities, offer a shorter lead time or invest increased time and attention on customer service, therefore clinching an all-important sale.

There is a long way to go in solving the productivity puzzle in the UK but it is a vital mission to save the UK business economy. Even a modest improvement in the performance of the bottom 75% of UK companies could generate an additional £130bn each year.

This productivity crisis is what inspired us to start our business productivity improvement programme. We know that improving business productivity across the UK would produce huge benefits for not just employees and businesses, but our larger society.

Paul Freudenberg - Awardaroo!

About Paul Freudenberg

Paul Freudenberg is a business productivity coach and consultant with a focus on operational excellence delivering improved profitability and business performance, and Founder of Awardaroo in 2005. Paul has set the mission of Awardaroo to help increase the business productivity of 10M businesses one behaviour at a time to amplify profitability, create a greener planet and build a better world by 2030. Connect on LinkedIn


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