It’s awfully tempting for the average business owner to think of profitability in the simplest possible terms. On one side of the equation, you have the cost of the goods and services you provide, and on the other, what your customers are willing to pay.
The difference is your profit, so these two variables tend to become the central focus when you’re optimizing for profitability. But there’s another dimension of profitability: one that’s tied to your employees. So your understanding of that dimension may be more critical to your bottom line.
The Employee Productivity Model
Picture your employees as investments. You give them a finite amount of money — let’s say $30,000 per year — and in return, they do you some kind of service. Let’s say they provide customer service over the phone.
Their productivity and effectiveness will earn you some kind of benefit. For example, if they manage to re-earn the loyalty of an upset customer, they could help your company earn $500. And if they process 100 customer complaints a day compared to the average of 80, they can be considered more valuable producers.
Think of this as a return on your investment (ROI). The better you understand and improve your employees’ productivity, the more you’ll stand to gain … and the best way to do that is through data.
The Rising Importance of Data
Why is data becoming more important to understanding your employees?
- More available data. For starters, more data is available in new and innovative formats. Thanks to big data and complex computer processing, we have access to volumes of information that previously were not available. We’re also able to quantify certain data points more accurately which were previously subjective, and we can dig deeper into specifics with platforms like time trackers to measure and analyze how workers are spending their time. All this accessible data offers the temptation to use it to improve your workforce’s efficiency.
- New working conditions. The shape of the modern workplace is changing, which increases the demand to measure workers’ productivity with quantifiable data points. According to a recent report by Dialpad, employees are only at their desks between 50 and 60 percent of the time. They may be in the field, in other parts of the office, or working from home (an increasingly popular option). Since you have no other way of knowing what your employees are doing when they aren’t at their desks, new methods of monitoring productivity have emerged to hold both parties (supervisors as well as employees) accountable.
- Greater competition. It’s also worth noting that the amount of HR competition between businesses has increased in recent years. Now that the majority of job hunting and recruiting occurs online, businesses can attract candidates from all over the country, and workers can choose to work anywhere they want. This results in better fits and more productive workforces. Other businesses also have access to the same data you have, so you’re almost forced to use it just to keep up.
Choosing a System
It’s impossible to track and crunch all the numbers on your own, but there are literally hundreds of employee productivity software platforms to choose from. Do your research proactively, understand your options, and consider your specific needs as a business before finalizing your decision.
How large is your organization? How many people are you tracking? What is the most important metrics for success?
Remembering the Human Side
Your employees can and should be regarded as investments, and how you manage their productivity will affect your overall profitability. However, it’s also worthwhile to view your workers as more than just numbers or objective ranks (as big businesses like Goldman-Sachs are finding out).
You want your staff to be content and comfortable. Only then will they be able to pour their passions into their work, and want to stick with you indefinitely. Look at the numbers and take action accordingly, but never forget that your workers are people with individual thoughts, feelings, and personalities.