How technology can help bridge the productivity gap

Posted on 10 Sep 2015 by The Manufacturer

Businesses that have a well-balanced workforce, managed by a fit-for purpose automated system, are realising higher employee engagement levels and productivity, explains Brenda Morris – general manager UK, Kronos.

The Summer Budget revealed that the UK economy is seeing steady growth. However, it also reflected that the nation continues to be less productive than other similar developed countries.

Brenda Morris, general manager UK, Kronos.
Brenda Morris, general manager UK, Kronos.

As a result, UK businesses have their work cut out as they face turbulent market conditions including rising costs and compliance risks.

What’s promising is the permanent rise of the Annual Investment Allowance, as well as the further devolution of powers to local councils in the North and the Midlands. Allowing councils to create local enterprise zones and set trading hours marks a significant step forward that will see eventual improvements in productivity.

But more can be done right now to bridge the gaps that are slowing productivity down.

The recent Unlocking the Total Value of Workforce Management Technology in the UK report revealed that increased visibility into workforce management data allows organisations to focus on improving productivity and performance, ultimately helping them grow top-line results.

Organisations with strongly aligned workforce and business planning processes demonstrated a 61% improvement in yearly revenue growth, and more than twice the improvement in customer satisfaction growth.

So what can today’s manufacturers do to make better decisions and make more effective use of workforce resources?

1) Reduce administrative overheads: Supervisors and HR managers lose several hours every week responding to admin queries from employees. In order to make better use of their time, organisations should let employees get the information they want themselves.

Providing online systems which are easily accessible anywhere, anytime, and offer 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.

2) Keep employee absence costs in check: 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 two or three times as much, and more importantly between 21% and 26% is believed to be non-genuine absences.

By using an absence management system to provide visibility and forecasting, organisations can accurately track absenteeism and the trickle-down effect it has on the entire business, improving productivity and minimising compliance risk, while addressing issues that may increase the rates of absence to improve team cohesiveness and morale.

3) Use overtime wisely: Overtime, if used in the right way, allows businesses to “flex their 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.

People and technology are at the heart of the manufacturing sector, and combining the two will help improve the UK’s low productivity quickly.

Now more than ever, organisations within industry need to have the ability to make the right decisions about labour and match these to production demand so that non-productive time is eliminated, and overall quality and output can be immediately increased.

With productivity in the limelight, UK manufacturers need to consider a more strategic investment in workforce management technologies, focusing their efforts on people and people-related processes in order to understand where there’s waste and where there might be opportunities to improve.