A third of Australia’s workforce falls below national productivity average - costing business more than $40 billion in wasted time

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Monday, 28 May 2012A third of Australia’s workforce falls below national productivity average – costing business more than $40 billion in wasted time.

While two-thirds of Australia’s workforce is ‘productive’, more than 3.5 million workers1 are falling behind the ‘national productivity average’ as well as wasting an average of 23% of their time at work.

Based on the average amount of time wasted at work, this group costs Australian business an estimated $41.3 billion every year in wages alone2.

The second six-monthly EY Australian Productivity Pulse™ found that the current economic slowdown was less likely to affect productive workers, but was impacting the productivity of workers who felt insecure about their jobs.

The findings also revealed that ‘unproductive’ workers took fewer breaks, spent more time travelling to work and less time on leisure and recreation.

EY Oceania Advisory Leader Neil Plumridge said based on the results of the latest survey, Australian workers could be profiled into four groups from ‘highly productive’ through to ‘unproductive’ with two categories of workers above the national average of 7.16 on a 10-point scale and two below.

The EY Worker Productivity Scale™ identifies the following key characteristics of the four groups:

1. “Super Achievers” - productivity ranking of 9-10 (23% of the Australian workforce): The ‘highly productive’ group spends at least two-thirds of their time on meaningful work and wastes just 12% of their day compared to the national average of 16%. A third of this group takes no sick days at all in any one year.

2. “Solid Contributors” - productivity ranking of 7-8 (46% of the workforce): The ‘productive’ group spends at least 64% of their time on meaningful work and wastes 15.7% of their day. Half of this group takes 1 to 3 weeks sick leave per year.

3. “Patchy Participants” - productivity ranking of 5-6 (24% of the workforce): The ‘less than productive’ group spends 58.4% of their time on meaningful work and wastes 19.6% of their day. A third of this group takes between 3 weeks to 3 months sick leave per year.

4. “Lost Souls” - productivity ranking of 1-4 (7% of the workforce): The ‘unproductive’ group spends only 50% of their time on meaningful work and wastes 27.4% of their day. This group is more likely to take extended periods of sick leave, and one fifth of this group takes between 3 months to a year of sick leave.

The EY Productivity Pulse™ measures Australian workers’ sentiments about their organisation’s and their own individual productivity, and is based on a survey of 2,500 employees spanning seven industries and from all levels within organisations, in both the private and public sectors.

The second wave of The Productivity Pulse™ found the average amount of time wasted at work across all groups had eased slightly from 18% to 16% since October 2011.

Mr Plumridge said the bottom or ‘lost souls’ group accounted for almost twice as much wasted time at work than the average. Additionally, those whose productivity levels fell below the national average contributed to 41% of the total waste occurring in organisations even though they only made up a third of Australia’s population.

“Lost productivity impacts the bottom line of both Australian organisations and the broader economy. That’s why especially during uncertain times, improving productivity can be a buffer against challenging conditions as well as a key driver of growth,” Mr Plumridge said.

“While we’re known worldwide for our relaxed lifestyle, we’re also a nation of hard workers.

“The vast majority of Australian workers rank above average on the productivity scale, and the survey confirms we’re motivated to come to work and do a good job.

Mr Plumridge said workers who are highly productive were much more likely to be proud to work for their employer, have clear career expectations and goals, feel they have opportunities and work within high performing teams.

“Clearly there is a net benefit for organisations to attract, develop and keep these people. However, it’s unrealistic to think that we can fill our organisations with 100% ‘super achievers’,” Mr Plumridge added.

Mr Plumridge said this was because of three key and interlocking reasons:

  • Management plays a significant role in boosting the productivity of their organisations
  • Every worker brings something valuable to the table and has a role to play in the workplace, and,
  • These groups were not static, and it was likely people moved between groups throughout their careers depending on their jobs, the organisation they work for, as well as their life stage.

“So, this is not just a question of sorting the ‘good’ from the ‘bad’.

“Even though we have identified four different groups of workers based on productivity levels, it’s likely that people switch from being productive to being unproductive throughout their work lives. This is a result of factors such as people feeling they’re in the wrong job or their skills are being underutilised, poor management or being disengaged with their workplace.

“For most people, satisfaction and greater productivity comes from doing their best at work, feeling valued and being part of supportive, high-performing teams,” Mr Plumridge said.

Mr Plumridge said the current economic climate, round of cost-reduction campaigns and redundancies had particularly impacted unproductive workers.

“Workers that feel insecure about their roles or are unsatisfied with their workplace have fallen further down the productivity scale as a result of the current slowdown.

“In contrast, highly productive workers are less affected by these external factors, are more likely to think they would be able to find a new job easily and believe that cost cutting will improve productivity,” Mr Plumridge added.

Other key findings of the EY Productivity Pulse™ included:

  • ‘Waiting for approval from a higher authority’ topped the list of time-wasting activities, followed by reading and responding to emails, and technology issues. Contrary to popular belief, social media only accounted for 4% of time wasted at work or less than 20 minutes a day.
  • Unproductive workers were more likely to spend time in unnecessary meetings than their more productive colleagues.
  • The most productive industries, based on their workers’ average ranking on the EY Productivity Scale™ were in order from most productive to least productive:
    • Healthcare and Social Assistance, Professional, Scientific and Technical Services, all other Industries, Trade (Retail & Wholesale), Manufacturing, Financial & Insurance Services and Mining (Resources).
    • Manufacturing, Financial & Insurance Services and Mining were slightly under the national productivity average.
  • The most productive states, based on their workers’ productivity average ranking on the EY Productivity Scale™ in order from most productive to least productive were:
    • Tasmania, Australian Capital Territory, Queensland, New South Wales, Western Australia, South Australia, Victoria and Northern Territory
    • Western Australians are equal with the national average, but South Australia, Victoria and Northern Territory all fall just below the national average
  • Productivity and motivation are closely linked, and both improve with age.

Mr Plumridge said six months on from the first survey, people management issues again emerged as having the biggest effect on productivity.

“It’s not time to hit the panic button just yet, but there’s obviously more work to be done within organisations to ensure people processes and management aren’t getting in the way of an engaged, efficient and productive workplace.

“From the macro perspective, Australian workers overwhelmingly believe the government’s most important roles in supporting organisations to boost productivity are to cut red tape and the regulatory burden of doing business, improving infrastructure and stimulating economic development.

“This points to both government and business sharing an equal responsibility for driving productivity in this country.”

Mr Plumridge said the Australian Productivity Pulse™ also revealed Australians now spend 51% of their working days either at work or travelling to and from their workplace.

“This confirms what many Australians had long suspected - that the eight-hour work day has all but disappeared. However, given productivity growth has been declining for more than a decade, longer working hours haven’t resulted in greater growth or productivity.

Mr Plumridge said highly productive workers spent slightly less time travelling to work, took longer breaks, and allocated more time to leisure and recreation.

“On average, people in the unproductive group spend 43 minutes longer than the highly productive group getting to work - which adds up over time. This means that the top group has more opportunity for their personal life and activities such as helping kids with their homework, going to the gym, or even cooking a meal.

“The research tells us in its most plain terms that when it comes to individual productivity, it is people that are suited to their jobs, work smarter and have a balanced life that are more productive,” Mr Plumridge said.

Additional findings of the EY Australian Productivity Pulse™:

Mr Plumridge said there were common characteristics for workers at either end of the productivity scale. For example, productive workers were more likely to:

  • Be contract workers or people with extensive tenure (6+ years in current role)
  • Be female
  • Work for a small organisation of less than 20 people or alternatively have responsibility for 500+ people
  • Be CEOs and Managing directors
  • Work with a high performing team
  • Be proud to work for their employer
  • Feel their work is valued and their leaders have focus
  • Have clear expectations and career goals
  • Feel their skills are developing and have access to opportunities
  • Work in a supportive and team culture
  • Show greater motivation level (aged 65 years and above).

Unproductive workers were more likely to:

  • Be male
  • Have low confidence in leadership
  • Believe their organisation did not operate efficiently and not believe it encouraged teamwork and transparency
  • Believe leadership did not understand productivity as a concept or how to measure it
  • Be unsatisfied, lack motivation at work and feel their skills are underutilised
  • Be unhappy at work, have a lack of direction and believe there are poor opportunities at their current organisation
  • Have poor work relationships
  • Have a poor work life balance.

Government’s role in improving productivity

  • Australian workers overwhelmingly believe the government’s most important roles in supporting organisations to improve productivity are:
    • Reducing red tape and regulatory burden and the cost of doing business
    • Implementing infrastructure projects to enable more efficient and effective supply chains, and to promote economic development
  • Australian workers placed refining industrial relations policies at the bottom of the list.

Greater focus required on innovation

  • More productive workers believe innovation is the strongest driver of productivity. These people agreed that: “Good ideas get implemented in my organisation”
  • More than half the workforce believe productivity would improve if their organisation became more innovative
  • 54% believe their employer fails to focus on innovation
  • 57% believe innovation is not recognised and rewarded
  • 59% believe their organisation is unwilling to try new things.

Technology remains underutilised

  • Two-thirds of Australian workers believe technology is important to their role
  • 58% believe improved technology would make them more productive
  • 40% don’t have access to the right technology or the right technology training to do their job effectively.

Public vs private sector productivity

  • On the whole, public sector employees spend less time on work that adds real value to their organisation and more time on activities they consider a waste of their time and effort. They also report spending more time on delivering products and services that are rarely or never used
  • However, there is a more complex picture with managers and professionals in the public sector being less productive, but community and personal service workers being significantly more productive than their peers in the private sector
  • Managers in the private sector are more productive and also more likely to have high job satisfaction as compared to the public sector.
  • Public sector employees overall are less likely to agree that they are motivated to do their job to the best of their ability.


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Contact details:

Katherine Rellos
EY Australia
Tel: + 61 3 9288 8322 or +61 408 993 196