Academic calls for utilising technology to beat a slump in productivity
HR leaders could play a pivotal role in reversing the productivity slowdown in Australia’s public sector by driving technological adoption and workforce engagement, according to a leading economist and labour market expert.
“The two ways to drive productivity is working resources harder, which is people, or through technological change and making things more efficient. In the long run, that’s all that matters,” Mark Wooden (pictured right), Professor Emeritus at the University of Melbourne, said.
While productivity is often measured in straightforward metrics in sectors like manufacturing, Wooden says in the concept can be more complex in some sectors.
“Take firefighters – if they were more productive, they’d be putting out more fires. Do we want more fires? We want them training but not fighting fires because that’s bad.”
To help get the most out of employees, Wooden highlighted HR has a key role to play in boosting engagement.
“Enabling technological changes falls into the remit of HR managers. Looking at inefficient firms, you want to see how you can streamline things can be pivotal – but you need to keep on top of best practice. Knowing the market, your competitors, what’s happening overseas.”
“You need to have good communication and dialog between your workforce. If that’s not already in place, you’re behind the eight ball. Workers need to feel valued, it’s in many companies’ DNA and could be the way we get people being more productive.”
For HR professionals in both the public and private sectors, the current productivity debate presents both a challenge and an opportunity: to lead conversations around digital adoption, invest in workforce capability, and champion the kind of organisational agility that can drive sustainable productivity gains in an uncertain economy.
This is a sentiment echoed by the Australian Industry (Ai) Group, who say productivity in Australia is currently "woeful."
"Lifting productivity will come through more efficient use of the tools we have at our disposal. Areas such as tax, regulation, skills, energy, workplace regulation, trade, technology adaptation and infrastructure development are all key to our productivity uplift and well-being, Ai Group Chief Executive, Innes Willox, said.
The productivity debate is closely tied to wage growth, Wooden explains. Without gains in productivity, real wage increases become difficult to justify. Yet Australia’s public sector struggles to attract top talent due to its perceived ‘low pay’ and limited career progression opportunities compared to private enterprise.
Since the end of 2020, Australia’s labour productivity has shrunk by 0.7 per cent each year, with the public sector subtracting 0.9 percentage points annually, findings suggest.
This is echoed by official statistics, which show the public sector detracted from growth through public investment (-0.1 percentage point).
Prime Minister Anthony Albanese has recently promised to host a roundtable to tackle productivity.
"We want to build the broadest possible base of support for further economic reform to drive growth, boost productivity, strengthen the budget, and secure the resilience of our economy, in a time of global uncertainty," Albanese said.
This has been welcomed by the Ai Group, describing the move as an opportunity to work on key policies to boost economic opportunity.
"It cannot be a set and forget exercise. Rather it should be the start of a sustained national conversation about working together to build an economy for the future," Willox said."
Wooden also outlined that – through using technology – there could be a greater productivity gain across sectors, using aged care as an example.
“The quality of service is what matters, not how ‘productive’ you are on shift. However, better quality service is going to cost more. Nobody’s prepared for the increase in costs and a lot of the residents in nursing homes don’t expect to pay more.”
“More and more people are expecting to be cared for in the Western world – which is great if we can afford to pay for it. Productivity in sectors that matter is so important, because increasing pay means quality could decrease,” Wooden added.
Through technology, however, mundane tasks can be removed to increase the quality of care being given.
“Robotics and AI, for example, are widely touted as being able to assist with routine labour-intensive tasks, thus enabling caregivers to be able to focus more on the emotional needs of their residents. That said, to date there is very little evidence of such technologies being widely adopted in Australian aged care homes.”
