Billions wasted through working time

by 27 Nov 2007

DESPITE RECORD levels of employment, Australians wasted an average of 19 per cent (45 days) of working time in 2007, according to a global report.

It found that unproductive time in Australia has actually increased over the past four years. In 2003–04, Australiarecorded just 29 per cent in unproductive time; by 2005–06 this figure had grown to 34 per cent.

Further, the percentage of GDP lost to inefficient work practices is highest in Australia at 9 per cent, translating to a $77 billion cost to the economy. At the other end of the spectrum is the USwhere wasted working hours costs the country only 5 per cent of GDP.

HSBC chief economist John Edwards said that Australian productivity levels could be much higher. “With labour hard to find and the Australian economy fully stretched, any substantial gains in workplace productivity are well worth exploring.”

The report, which was conducted by Proudfoot Consulting, found that barriers to improved workplace effectiveness include: inadequate workforce supervision (31 per cent); poor management planning and control of work (30 per cent); and poor communication (18 per cent).

Based on a global survey of 500 business executives, 100 of which are located in Australia, the report also found that twice as many executives in Australia identified poor management and poor supervision as significant barriers to productivity.

Peter Braithwaite, vice-president of Proudfoot Consulting, said the report raised questions around the ability of executives to accurately assess their own company’s performance. “Executives appear to over look fundamental workplace inefficiencies rather than acknowledge and address them,” he said.

“In a climate of increasing interest rates and inflation, companies need to embrace their responsibility of improving productivity at the micro level. Addressing workplace inefficiencies now will have long-term benefits including healthier bottom lines, increased competitiveness and happier employees, not to mention billions of dollars for the economy.”

As the skills and labour shortage grows, so does the importance of the way companies manage and develop their people, Braithwaite said. “HR management and utilisation can significantly impact a company’s productivity levels as well as profitability.”

Poor frontline management has always been a prominent reason for wasted working time, he said, and in his experience this has risen to become the dominant factor in the last two years.

“Poor frontline management directly impacts the bottom line as well as causes frustration at both a supervisor and frontline level. This in turn leads to unhappiness, low morale and a high staff turnover,” Braithwaite said.

Frontline managers’ roles are constantly expanding to include a range of new softer skills, and at the same time, he said their ability to meet performance objectives is becoming increasingly difficult.

Steps to improved productivity

• Clarify job roles and set appropriate standards of performance for staff. Make sure that these expectations are clearly communicated to staff.

• Invest in workforce training and management development.

• Promote and encourage active management. Find out what frontline managers need to do a better job and provide them the resources, training and skills to do it.

• Provide effective coaching to managers as they operate in a more interactive and challenging manner with their staff.

• Make workplace productivity and efficiency part of the company culture. Communicate actual performance against the formal productivity target and at management meetings, staff meetings and/or internal newsletters.

• Install a management operating system that provides management with the right tools to actively manage their areas.

• Reduce unnecessary rework with a 'one-touch' policy. Identify bottlenecks in the work process and review and improve the process.

• Set a formal organisational productivity improvement target. You will first need to identify the exact status of current business performance.

• Introduce a continuous performance improvement job function that oversees improved processes, systems and behaviours with regular review and modifications where needed.

Source: Peter Braithwaite, vice-president of Proudfoot Consulting,

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