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How unproductive work is costing business $109 billion

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Facebook isn’t solely to blame for a lack of productivity in Australian businesses. According to a new survey from Ernst & Young, one-fifth of work completed by motivated workers is actually a waste of time. Hours wasted on inefficient systems and red tape actually accounts for a total $109 billion in wages lost each year.

The Ernst & Young Australian Productivity Pulse mapped the average Australian worker’s day and found that only 58 per cent of the work day adds ‘real value’ to the company.

The cost of wasted time is a burden to both private and public Australian companies, as well as to the broader economy, says Neil Plumridge, Ernst & Young advisory leader.

“This means that every single day $320 million is lost in valueless work. If we improve that by just 10 per cent, the impact to Australia’s productivity would be tremendous,” he says.

“This doesn’t mean we are a nation of ‘slackers’. Quite the opposite is true.

“Australia is one of the hardest working countries in the world and given an overwhelming 71 per cent of workers are motivated to do their job to the best of their ability, we simply can’t put the productivity issue down to personal motivation,” says Plumridge.

The factors which contribute to productivity include:

  • People management issues (54 per cent)
  • Organisational processes (23 per cent)
  • Innovation (15 per cent)
  • Technology (eight per cent).

Plumridge says people management issues undoubtedly play the largest role in influencing productivity, and despite financial incentives considered the golden key to boosting productivity, this is not always the case.

“Salary, incentives and bonuses fall short across the board with only 13 per cent of respondents saying it is a driving factor. This reinforces the notion that monetary rewards are not the silver bullet when it comes to lifting productivity,” he says.

So if it’s not about giving raises, what's the solution?

“Organisations need to think in terms of making bolder, more revolutionary changes that move them into a higher zone of productivity, well above the long-term average of one to two per cent a year,” says Plumridge. “Rather than cut jobs, organisations should be looking to eliminate wasteful work and redeploy those resources to growth and investment areas.”

The solution, according to Ernst & Young, could involve a range of initiatives, such as removing non-value, bureaucratic work, embracing technologies which drive efficiency, encouraging a culture of innovation, putting in place effective structures and developing the full talents and capabilities of workers.  

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, October 19, 2011

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