Labor productivity, or simply productivity, is the calculation of output per employee. It is incredibly important for any business, especially a factory. You can calculate productivity by dividing production per period (units) by the number of employees at work. So, for example, if a factory makes 5,000 units per month and has a workforce of 500 employees, its productivity is 5,000 divided by 500, which equals 10 units per worker. Depending on the industry, this could be good or bad.
So what influences labor productivity? Well, there are four main factors. The first is the quality and quantity of your fixed assets. By fixed assets I mean things like machinery, equipment, computer systems,… If you don’t have enough, or it’s of poor quality, your productivity will be low. Additionally, the skills, ability, and level of motivation of your workforce are a major contributing factor. If your employees can’t or won’t do their jobs, productivity will drop. Next, which production organization method do you use and is it the most effective for your business? And finally, external factors, such as the reliability of your suppliers, influence labor productivity. If you use a just-in-time production method, if your suppliers are a few days late, production stops.
So with that in mind, what can you do to improve work productivity? There are many ways to do this, but not all of them will be suitable for your particular business. But, for almost all companies, their workforce is the most important asset. If they can’t do their job, you really don’t have much of a business. Therefore, train your staff. You can do it at work or outside of work. On-the-job training includes shadowing other employees and personal support within your organization. Off-the-job training includes courses and seminars outside of your organization. Training will not only teach your staff new skills to do their jobs more efficiently, but it will also give them a feeling of being valued, which brings me to my next point, which is motivating your staff. This can be done in many ways, but a couple are improving the workplace (for example, redesigning, bringing in more light, creating an open-plan feeling so employees can chat instead of getting bored) and setting goals and rewards in function of them, either financially, like bonuses, or non-financially, like more paid vacations or just plain praise. Lastly, try to improve your production processes. This can be done by using a different production method, such as inventorying raw material stocks instead of just-in-time, and/or investing in newer, more efficient equipment, such as computer-based automation.
So, there we are. I hope you find value in this article and have some ideas to apply to your business to improve productivity. Good luck and take care.