What is workforce productivity?

Workforce productivity measures the output of goods and services a team can produce in a given time frame.

When businesses take the time to look at how engaged their employees are, how they work, and the workplace conditions, they often find areas they would like to improve.

Workplace productivity is on the rise. According to the Bureau of Labor Statistics, productivity increased by 5.2% in Q3 2023.

This guide will explain workforce productivity and how to measure and improve it.

Increasing workforce productivity means getting more done with the same number of team members.

For example, a company is more productive if the same number of team members can create more goods and services.

When business leaders measure labor productivity, they can make better decisions that help their bottom line.

What factors affect employee productivity?

There are a variety of factors that help businesses increase productivity:

• Working environment and working conditions: What is the working environment like for your team members? Are they comfortable enough with their working conditions to produce their best work?

• Employee engagement and incentives: Are employees motivated at work? Are there any incentives that will encourage employees to go above and beyond?

• Flexible working conditions: Are the company's working hours flexible? Can they work from home?

• Employee morale: Is everyone on the team comfortable? Are there things you could be doing to make them happier?

• Human Resources: What are you doing to help your team? Do you offer adequate benefits? A direct line of feedback?

• Ways of working: Can you streamline processes to make workflows as effective as possible?

Why is workforce productivity important?

Poor workforce productivity harms an organization's competitiveness and profitability. Enhancing workforce productivity is a goal for any business owner, but what do companies stand to gain with labor productivity growth.

Business leaders must determine what improves performance and output and which workflow patterns hurt profit — especially as remote work becomes the norm.

Our data shows that there is productivity growth for remote teams. The average remote employees spend 4.15 more hours in a focused state of work each week, about a 22% gain compared to the average in-office worker.

By building a productive workforce, you can also:

• Enhance employee engagement

• Foster a positive work environment

• Boost employee morale and motivation

• Increase employee productivity

• Find better ways of working

• Improve working conditions

• Enable remote work and flexible working conditions

• Improve decision making

• Increase profitability

• Improve staff retention

Improving workflows and human capital support produces positive results. Of course, results depend on what you do and how effectively you do it.

Minor changes are easier to make but have less of an effect. Large-scale policy changes (like implementing new software to automate jobs) can take longer but pay off in the long run.

Keeping track of your employees' productivity lets you see the big picture. This lets you determine where your current workflow and policies influence productivity.

By looking at metrics carefully and tracking them over time, companies can make decisions that boost workforce productivity.

How do you measure workforce productivity?

Measuring workforce productivity starts with establishing individual or departmental performance metrics — but it’s not as difficult as it may sound.

For example, if you want an accurate metric for workforce productivity, consider defining and measuring tasks, not just hours worked.

Employers can set reasonable goals and expectations for each department or position with the right metrics. They’ll also need a way to keep track of those goals.

Some business leaders use a software platform to measure workforce productivity.

Platforms with workforce management features show metrics about workforce productivity in real time.

• See real-time updates on how many hours each team member has worked.

• Find out what apps and tools your team is using.

• Identify productive and unproductive apps and websites.

• Track tasks and projects and move them forward.

• Set and track productivity benchmarks.

• Celebrate team members who have made the team more productive.

How often should you measure workforce productivity?

How often you review workforce productivity depends on your preference and how you are measuring workforce productivity.

Organizations need to keep a close eye on proof of work and the overall productivity of their employees. Especially if you have a high turnover rate, a low ratio of hours worked to output, or need to improve performance.

A great place to start exploring ways to increase workforce productivity is to carefully consider your organization's workflow, culture, and workplace environment(s).

Here are six things you can do to increase workforce productivity:

1. Make the workplace better

Check-in with your team to find out their work conditions. Each team member should have access to a user-friendly working environment and working conditions. Ensure that the team's technology needs are met, that their physical workspaces are ergonomic and comfortable, and that they take regular breaks.

2. Raise employee morale and engagement

When employees are happy with their jobs, they stay with their companies longer and do better work. They are also healthier and more comfortable. Team-building days, like remote retreats and pub trivia on Slack, can keep employees engaged and boost morale.

3. Empower employees

Make a good training and professional development policy so that every worker has the skills to do their job. Training empowers and prepares team members for promotion, promotes morale, and encourages continuous productivity.

4. Quickly adopt new tech.

Your business can save time and money by automating tasks with software like Hubstaff for workforce productivity. Technology will free up time for your employees, boosting morale and labor productivity.

5. Get help from human resources

A helpful human resources department can make a big difference in employees' productivity. Benefits and incentives for health and wellness keep employees healthy and motivated. They also cut down on sick days, making the workforce more productive.

6. Offer salaries and benefits that are competitive

Productivity may go down if wages and other forms of payment are below industry standards or don't reflect an employee's worth and effort. Ensure you pay your team members a fair wage and give them good benefits.

When managers collect data on workforce productivity, they can improve processes so employees work smarter. Hubstaff and other workforce management tools help you bring the future of work into the present.

Using workforce management software to keep track of your team's productivity can help you make better decisions.

With the Hubstaff app, it's easy to track how productive your employees are. Managers can use task tracking to find bottlenecks and improve their team’s workflow.