State of play for the
New Zealand workforce
The EY New Zealand Productivity Pulse™
Productivity may have lifted in the past 12 months, but several factors in the underlying economy could reverse this trend.
While cost-cutting and corporate restructuring have resulted in a net productivity gain for the nation, our survey shows that restructuring stress may be starting to reverse this trend.
Worker confidence in job security plummets
For the first time since the Pulse started 12 months ago, we’ve seen a fall in worker sentiment over job security (-4 percentage points) and confidence in the job market (-2) in the past six months. In Edition 3, only 23% of workers said they felt secure in their current role.
This is important, as job security goes hand in hand with productivity. Only 9% of Lost Souls felt secure, compared with 28% of Super Achievers.
Cost cutting and redundancies continue
The shift in worker sentiment has been at least partly caused by renewed cost cutting activities and/or redundancies in the past six months. Of those who had experienced declines in productivity, more than a quarter (24%) reported restructuring was responsible for the decline.
This effect was particularly apparent in the public sector, where 53% of workers said they had seen cost cutting or redundancies, versus 39% in the private sector.
The Pulse identified $30.5 billion in untapped potential across all productivity segments, with five in six workers (87%) believing they could be more productive in their role to some degree. On average, employees from all levels, and across all sectors, said they could be 23% more productive in their role.
Clearly, there is a vast gap between what productivity levels could look like and what is actually happening in New Zealand workplaces. We believe business leaders have an unconscious awareness that this productivity potential exists – but must now act to proactively tap into it.
Who has a >50% productivity potential?
Workers with a greater than 50% productivity potential are more likely to be junior employees, aged 20-34 who have been with their company for fewer than three years.
Looking across the productivity profiles, Lost Souls possessed the greatest productivity potential, with 42% claiming they could be upwards of 40% more productive if they could change one or two things in their job. In contrast, 15% of the most productive workers thought they could be more than 40% more productive.
Productivity level update
The Pulse found the national productivity average has increased from 7.34 to 7.47 (based on a ten point scale) over the year, plateauing just slightly above 7.42 in November 2012. Although the overall uplift is encouraging, we are concerned about a growing divide between productive and unproductive workers. The Pulse reveals an average difference of 2.3%, up from 1.8% in November in agreement between high and low productivity workers that the workplace factors driving productivity were present.
Also, workers attributed most productivity improvements in the past six months to their own efforts, making tactical, incremental improvements to the way they work. In contrast, productivity declines were attributed to poor people management creating a lack of motivation, reward and recognition in the workplace.
Changes by industry
Productivity ratings across all industries remained steady and there are no significant differences between industries. That said, some trends are appearing, with productivity in Manufacturing and Retail and Wholesale increasing marginally in each survey, and productivity within the Healthcare and Social Assistance and the Professional, Scientific and Technical services falling marginally over the same period. Nearly one in two workers (46%) in the latter group reported cost-cutting or redundancies in the last six months which may have begun to take a toll on perceived personal productivity.
The Pulse profiles New Zealand workers in four groups, with two categories of workers above the national average of 7.47 on a 10-point scale, and two below.
The proportion of Solid Contributors has grown from 45% to 54% in one year since the Pulse began. This trend is mirrored by a decline in the proportion of the highest Super Achievers and lowest Lost souls.
Growing divide between productive and unproductive workers
Despite their declining numbers, Lost Souls have become even more unproductive, disengaged and wasteful, while Solid Contributors and Super Achievers reduced their wasted activities – creating a widening gap between the two ends of the productivity spectrum. We are concerned that 38% of already unproductive Lost Soul workers reported further declines in productivity in the latest edition, (up from 23% in edition 2).
Who has productivity potential?
Disengagement of Lost Souls
New Zealand is struggling to influence the least productive people in our workforce. While their more productive colleagues continue to lift their performance, Lost Souls are wasting one hour and 40 minutes of their working day. Waiting for other people and social media are their top time wasters.
Worryingly, Lost Souls are more likely to be found in the new generations of workers. These people are more likely to be junior employees, aged between 25 and 34. On average, they believe they could be 42% more productive, compared to 19% for their high productivity colleagues.
Without leveraging this part of our workforce we are missing a sizeable chunk of an organisation’s as well as the nation’s productivity. This will require better communication about the benefits of and practical measures for individuals to improve productivity. It may also include showing this segment career development and progression opportunities and reconsidering their employment benefits.
Productive workers reduce wastage
Despite productivity remaining relatively static, the total time spent on wasteful activities in the workplace has declined significantly, with a growing split between productive and unproductive workers.
The proportion of the working day attributable to waste fell from 15% to 11% in the last year. This was driven by reductions in waste in the two most productive segments, while Patchy Participants held steady. However, wastage by Lost Souls increased by 2% to 23% of the working day.
Productive workers are now wasting approximately 1 hr 30 mins per day less than unproductive workers – up from one hour, six months ago.
Waiting for other people continued to be the largest contributor to wasted time within each productivity segment. Time spent waiting for others increased significantly, from 18% six months ago to 24% in the latest Pulse.