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The Connection between Employee Productivity and Business Profitability

Recent occupational studies conducted by credible organisations state that there’s a direct correlation between employee productivity and business profitability in the workplace. Making a profit doesn’t imply that the business is productive. The management also plays a major role in maintaining superior output and profitable outcomes by ensuring their staff members perform well.

There’s a reason why companies with more engaged and productive employees increase a company’s profits more than disengaged ones. Here are a few tips you can implement to significantly increase productivity and profitability through novel employee engagement strategies.

The Connection between Productivity and Profitability

Productivity is described as the relation between the output and input that’s required to create a product. On the other hand, profitability is defined as the money that’s leftover after creating the product and paying off other expenses. Studies on organisational psychology state that high-pressure work environments have a considerable impact on productivity over time. Employees respond much better to an environment that makes them feel secure and valued.

The Importance of Employee Engagement

People often question the importance of employee engagement when money is coming in, and profits are high. However, it is crucial to keep in view that in the long-term, profitability is not sustainable without commitment and an engaged workforce.

Employees who are not invested in the business will not put in much effort into the work they do. They will lack the motivation and not take the extra effort to complete an assignment on time or even sharing their input for that matter. However, employees who feel valued and secure in the workplace are more likely to contribute to the business.

There are certainly other personality types that are better suited to higher levels of engagement than others. By involving them in big-picture strategies and asking them to contribute, employers greatly increase the staff’s odds at long-term success within the company.

Research on Employee Engagement and Performance

Recent studies have also shown how employee disengagement affects a business. Statistics state that employees who are disengaged are 60% more likely to make mistakes, 37% more likely to miss work, and about 49% more likely to have accidents. These studies also show that companies with lower levels of employee engagement are roughly 16% less profitable.

Increasing Productivity in the Workplace

Now that you see that employee engagement in one of the critical factors for increased productivity, here are a few practical ways that you can increase productivity in the workplace.

  • You can start off by showing a genuine interest in the personal lives of your employees. Consider being understanding and providing them with support each day.
  • You can also forgive them for mistakes made (within reason), which helps to inspire them and make them feel more passionate about their work. This can also help them model their work after yours.
  • Also, start emphasising on the importance of the work carried out by your employees. Put in the extra effort and guide ones that are struggling with adjusting in the workplace, and need mentoring.
  • A few essential qualities that managers should adopt are visibility and transparency. This results in an open and accessible workplace. Engage your employees outside the office by organising an office sports team, or volunteering for a charitable cause.
  • Today, several businesses are taking the virtual route and employing work-at-home employees. As a result, face-to-face time is relatively low. Although remote working arrangements are excellent for cutting overhead costs and giving employees the flexibility they want, a lack of communication exists. However, to bridge this gap, several businesses are now renting out spaces to hold in-person meetings and work together on new ideas.

For more information on the connection between employee productivity and business profitability, contact the experts at Benchmark Cost Solutions at this number – 02 9525 0777. If you prefer, write to us at this email address, and we will revert quickly.


Thanks for reading,
Benchmark Cost Solutions Team
02 9525 0777