The U.S. Bureau of Labor Statistics reports that worker productivity decreased nearly three percent in the first quarter of 2023—the sharpest decline in 75 years. What’s behind this sudden drop? There are several theories, and despite popular opinion, remote work might not be the sole culprit. In this week’s blog, we explore the potential causes of low productivity in the workplace right now and what employers can do to reverse the trend.
The workplace has gone through tremendous change over the past three and a half years.
The pandemic and shift to remote work; the Great Resignation; and “quiet quitting” are just a few of the monumental changes that have unsettled workplaces and upended traditional norms.
In the early days of the pandemic, worker productivity actually increased in spite of these shifts. McKinsey attributes the rise in productivity to the “bold and innovative response” many firms took, including rapidly shifting to online channels, automating production tasks, increasing operational efficiency and faster decision-making.
Now, however, worker productivity is declining and organizations understandably want to know why.
Some have cast blame on remote work, claiming that remote workers are less productive and more prone to distractions at home. Yet research has found that remote workers are actually 13% more productive than their in-office counterparts, less likely to take sick days and more likely to be satisfied with their jobs.
Certainly, more research needs to be conducted to determine the full impact of remote work on productivity. What is abundantly clear, however, is that there is a huge disconnect in the way employees feel about remote work and how managers view it: employees feel they are much more productive working remotely, while managers disagree.
Part of the disconnect may lie in the fact that managers can’t “see” the work being done, so they underestimate the number of hours employees are putting in, and also feel a general lack of control over the people they manage. This is leading many senior leaders to mandate in-office time, despite its unpopularity with their workforce.
Aside from the speculation and disconnect about remote work, what other factors might be contributing to the recent decline in worker productivity?
- An uncertain economic outlook. The threat of recession still looms, leading to hiring freezes and layoffs (particularly in the tech sector), which increase workload and reduce productivity for the employees who remain. Supply chain problems, geopolitical uncertainty, and extreme weather are also contributing to a general jitteriness in the economy.
- Personal financial insecurity. Workers are also feeling shaky as much of the savings they amassed during the pandemic have now been exhausted due to high inflation. As we know, employees who are worried about their finances are more likely to be distracted at work and often devote work hours to handling financial issues.
- Worker burnout. A survey by Aflac found that more than half (59%) of all American workers are experiencing at least moderate levels of burnout. The same survey found that 46% of workers felt their mental health has negatively impacted their productivity.
- Workforce turnover. The Great Resignation, during which an estimated 47 million Americans voluntarily quit their jobs to take a new job or exit the workforce altogether, has had a huge impact on workplaces.
- Lack of purpose at work. On the heels of the pandemic, many employees are questioning whether the work they do is fulfilling and meaningful. Lack of connection to a larger purpose can leave workers feeling less motivated and lead to “quiet quitting,” where employees do the bare minimum of work required.
- Poor employee engagement. Gallup’s State of the Global Workforce: 2023 Report found that while the percentage of engaged workers has increased slightly over the past year, the majority of the world’s employees (59%) still are not engaged, and 18% are actively disengaged. Gallup has long asserted that worker engagement is highly correlated with productivity.
10 things employers can do to shore up worker productivity
There is no one easy solution to boost productivity at work. Rather, a combination of efforts centered around well-being, clear expectations, feedback loops and skill building can help employees stay engaged and productive. Here are some examples:
1. Invest in employee well-being. A healthy employee is a productive employee, so offer a well-being program that gives your people the tools to focus on nutrition, exercise, sleep, stress management and resilience. Just as critical is the tone that leadership sets around the importance of employee well-being and self-care.
2. Set clear expectations around job responsibilities. When our priorities are unclear, or we don’t have a strong sense of the goals we need to achieve at work, we tend to spin. Younger members of the workforce, in particular, need clearly delineated objectives. Gallup recently found that less than four in 10 young or remote or hybrid employees clearly know what is expected of them at work.
3. Give managers the tools to be empathetic leaders. In today’s world, leaders need to practice empathy in order to get the best from their people. Offer training to upskill managers to demonstrate more caring, concern and understanding of the feelings and circumstances of their employees, and help them create psychologically safe workplaces. When people feel they can bring their authentic selves to work they will be more engaged and therefore more productive.
4. Provide access to training and learning and development. Sometimes a lack of productivity can be caused by a skills mismatch. Ensure people have access to training and learning and development programs that give them the right skills for the job, and the ability to continue to learn and grow in their roles.
5. Connect everyone to the larger purpose. Increasingly, employees want to feel that their work has meaning. Continually make the connection between work and how it ties in to the overall goals of the company, and the greater good in society, if applicable.
6. Communicate openly and frequently. Good communication starts at the top, so ensure there are multiple touchpoints with senior leaders who can keep employees updated on the organization’s performance and goals (see number 9). Also encourage managers to have regular check-ins with employees to check progress and align on priorities.
7. Encourage employees to take breaks. Contrary to popular belief, taking regular and frequent breaks during the work day tends to increase, not decrease, our focus and productivity. Breaks could include short meditations, a walk outside, or a quick fitness class.
8. Allow for flexibility. Not every employee does their best work from 9 to 5. If the business allows, let employees set work hours according to the times they’re personally most productive. This could also include compressed or four-day workweeks.
9. Offer tools to combat stress and burnout. Employees cite work as one of the greatest sources of stress in their lives, so it makes sense to offer tools to help them better manage stress before it leads to burnout. Apps or short courses that help people reframe negative thinking are effective.
10. Recognize and reward employees. Praising people formally or informally gives them a sense of accomplishment, makes employees feel valued for their work, and is a great motivator. Both manager-to-direct-report and peer-to-peer recognition can positively impact productivity. There are many ways to recognize employees—from formal recognition platforms to simple handwritten notes. The important thing is to make it a regular part of the culture.
When you come down to it, productivity in the workplace is really all about the employee experience. Workers who feel supported in their well-being, understand what’s expected of them, and feel equipped to make a meaningful contribution to something larger than themselves will naturally be more productive. If you’d like help for how to deal with worker productivity concerns in your organization, contact us at email@example.com.