Carl Taylor Senior Consultant

Your people are your most valuable asset, they are your competitive advantage, but are they being productive? In this article Consultant, Carl Taylor discusses 5 key tips to improve productivity…

You’ve heard it before and we’re going to say it again - your people are your most valuable asset; they are your competitive advantage. They are also likely to be one of your biggest investments (the biggest expense on your profit and loss), so nurturing and improving the productivity of your staff, can have a significant impact on the rewards you (and they) achieve.

To start with, it’s essential to know what return you’re getting right now, and the fundamental measure for staff productivity in business is the productivity ratio:

Worked example

  • Overhead wages = £600,000 per annum
  • Commercial salaries for directors – 5 full time working directors at £80,000 = £400,000
  • Total = £1,000,000
  • Gross Profit of £3,000,000

£3,000,000 Gross Profit divided by £1,000,000 total overhead labour cost = Productivity Factor of 3

From the results we see, most businesses are achieving a productivity of between 2 – 3. If you’re coming out at less than 2, you’re unproductive and inefficient. If you’re hitting 3 – 4 then you’re on target – above 4 and you are cruising. Can we improve productivity? Here are 5 key tips:

Streamline and cut out waste by investing in your systemsThere’s nothing that saps the time and energy of your workforce like manual data entry and inefficient systems – investing in up-to-date systems lets you cut out wasted time entering data into systems in multiple places, releasing time to spend in productive areas. Taking advantage of the benefits of cloud software can also boost productivity by allowing staff in multiple locations to access your systems from anywhere at any time.

Set realistic and achievable targets for each staff memberSet targets for employees that are both realistic and will stretch them. Set targets for salespeople based on 5 or 6 x their salary, and make sure you measure their performance against the targets – after all ‘what gets measured gets done’.

Have salespeople focussed on the most profitable productsMake sure your salespeople’s time is invested in selling the products that will yield the most gross profit, so their time yields the highest return.

Improve employee skills through trainingTraining is a crucial part of ensuring productivity – even just making sure your employees know their way around your systems.

Make sure you’re not overstaffedWhile outside expertise is needed in business to help us forward, employing full time experts with a narrow field of expertise can be a financial drain on your business. Get experts in to advise on specific projects as and when you need them.

Spending time on these 5 key points will help you increase productivity and will set you on a course for increased profitability, improved cashflow and greater rewards for you and your staff.

For more information on how we can help you and your business, please contact us at or call 02476673160.

Please note: This article is provided for information only and was correct as at time of writing (11/04/22). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.