1. The relationship between productivity and business growth

When employees are productive, they are either doing more work in less time or taking lesser hours to accomplish work. This helps in reducing operational costs. As a result, producing the same output requires less workforce, which in turn increases profitability.

Additionally, improved customer satisfaction gives a competitive edge and offers more opportunities for growth. One will observe increased employee engagement and improvement in morale that will eventually reduce employee burnout.

In a nutshell, high productivity ensures business profitability and employee retention thereby making your business more sustainable.

2. How does low productivity impact the business?

1. Reduced profitability

Lower work rate (or productivity) results in poor performance of employees which ultimately affects the quality of deliverables. When the end-users are not satisfied with the product, profitability will go down.

Moreover, time and cost spent on the resources that are not performing at their best also reduce the profit margins. This is because the production costs exceed or is almost nearer to the billing costs. Productivity is, therefore, a major deciding factor in the profit margins for the organization.

2. Employee disengagement and lower team morale

When productivity spirals down, it influences the team morale and engagement. Managers will start noticing a decline in initiatives taken by their employees. Besides, employees will be least interested in resolving project issues.

With employee disengagement comes lowered team spirit. When work is not progressing well, or when the team members do not feel valued, it will affect their performance. This may eventually lead to their separation from the organization.

Leave a Comment