It’s no surprise to anyone that our economy is currently struggling to maintain its momentum.
The productivity of workers in America dropped 7% during the first quarter this year -the largest drop measured since World War II. Worker productivity is the key metric which indicates creation of profits in companies and wage increases in the US.
Labor (or worker) productivity is the measure of how much good or service an average worker can produce in one hour. It’s calculated by looking at regular workers, self-employed folks, as well as unpaid people – all divided against Gross Domestic Product (GDP).
In the 1990s, with the introduction of computers and internet, worker productivity grew. More goods and services were produced, and profits and wages increased. After the tech bubble burst, productivity evened out, and things were humming along fairly predicably until the pandemic.
As the economy shut down, worker productivity took a nose dive.
In an attempt to stimulate the economy, our government pumped large amounts of money into the economy in anticipation of worker productivity rebounding once things returned to “normal.”
Demand was stimulated, but worker productivity has continued to plummet. The 7% drop in first quarter was followed by a slight increase to 4% drop in Q2. Please note that worker productivity is usually measured in fractions of a percent.
If worker productivity doesn’t increase, it’s going to mean bad news for your business profits (and the economy as a whole).
Have you taken a serious look at the productivity of your workers?
Do you have workers who have jumped on the quiet quitting bandwagon or become a little too relaxed working remotely? If so, it’s critical to address the issue now. You can’t afford not to.
We can help you navigate through top-grading your team, building programs to keep employees motivated and productive, and designing onboarding and retention plans to attract and keep those top performers.
Let us know how we can help.
