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How much is lost productivity hurting your bottom line?
By Carolyn Jenkins,
May 30, 2014
When workers spend too long on a sales call or are distracted by their friends' social media posts at work, employers can lose money because of lost productivity. Workers who are not engaged or are managed poorly may also cost the company and impact its bottom line. Employers should be cognizant of the potential losses they may face if they do not effectively track worker performance and correct signs of unproductive behavior.
Causes of lost productivity
Although employers may not be aware of the costs of lost productivity, there are multiple factors that go into these kinds of financial losses. For example, injuries or illnesses can affect companies' bottom lines because of absenteeism, Workforce reported. However, these absences may be hard to quantify into financial losses.
"There are so many pieces of the puzzle that very few companies have a really good handle on what the actual total costs to the organization are due to absence in the workplace with all those categories of time off," said Charles Fox, executive director for the Disability Management Employer Coalition, according to Workforce. "However, I think that intuitively they all know that it is significant, and it is a humongous number."
Workers, especially the company's top performers, who are not present in the workplace may cause their colleagues to take on extra work, which can cause them more stress.
While absenteeism is a big problem for businesses, they should also be cautious of another major issue: presenteeism, Workforce reported. Employees who are not engaged with their job may come to work, but may not be as productive as their engaged colleagues, which could result in productivity losses. Companies should make sure their workers are engaged through offering incentive compensation that can help give them the drive they need to succeed and be rewarded for hitting their benchmarks.
How to determine productivity losses
Businesses that may want to figure out how much lost productivity is impacting their bottom line could follow suggestions from Harvard Business Review. Time equals money for almost every business. Identifying the causes of where time is spent may help companies determine the cost of productivity losses. Companies could consider measuring the cost of productivity losses through finding errors that result in wasted time, according to Harvard Business Review. Employers may want to review whether employees met their sales quotas and generated revenue for the company or may have made mistakes that could have cost the company both time and money by using sales effectiveness metrics.
How to effectively manage workers for increased performance
While creating an accurate way to measure the cost of lost productivity is difficult, companies may want to implement sales performance management tools that could determine whether workers are being as productive as they could be. By installing this software, employers can monitor employee performance and gain insight on whether they are hitting their sales quotas or not.
These solutions can also help give workers valuable information into their own performance that could help improve productivity. Harvard Business Review supports feedback loops that involve presenting workers with individually tailored reports. These reports are useful because they can be used to pinpoint causes of productivity loss as well as drive the conversation between employers and workers about issues they may have with their job. Conversations about what is bothering them can help workers become more engaged with their job and in turn work harder to meet the company's business objectives.
By investing time into performance reports, companies can also work out whether they need to provide more sales training for employees to help them use their time for efficiently, Business 2 Community suggested. Training is a crucial element to getting workers as productive as possible.
About the author
Carolyn Jenkins leads the Customer Success team in exceeding our customer's expectations by continually fostering a customer-centric culture throughout the entire organization and building true customer advocates that speak to the business value achieved through Iconixx solutions.