8 Top Strategies and Metrics to Improve Business Productivity

The journey towards increased business productivity can sometimes feel unending. As companies worldwide work on achieving progressively better results with limited resources, streamlining work processes and optimizing productivity have become crucial parts of business growth and a sure way to measure success.

Now, there are many ways to streamline organizational processes — too many to fit in a single article. So, for the sake of simplicity and to make this article more helpful, we’ll focus on answering a single question: What can a business do to improve its productivity? 

But before we tackle that, let’s first make sure we’re on the same page regarding what constitutes business productivity.

8 Top Strategies and Metrics to Improve Business Productivity
In this guide, you’ll learn:
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What Is Business Productivity?

definition of business productivity

Business productivity is explained as the volume of output an individual, team, or entire company can generate relative to the amount of resources needed to create such output (input). 

For instance, if a business deals with, let’s say, customer service, and on Thursday they cater to 1000 clients, but on Friday they serve 1200, that translates into Friday being a more productive day. Of course, this is all with the assumption that the number of resources (or inputs) was not increased on Friday and that no exceptional circumstances took up more time and energy away from the workforce.

The two standard types of inputs that should be considered when talking about business productivity are capital and labor resources.

Capital resources include expenditure on means of production, such as machinery, computers, and other equipment needed for work. On the other hand, labor resources include labor costs, work hours, availability, etc. 

However, there are other types of inputs that vary depending on the nature of a particular business and could include raw materials, cost of acquired services, energy and technology costs, transportation, and more.

The way your company utilizes its resources can ultimately determine its productivity. And why is business productivity important? Let’s take a look.

Why Is Business Productivity Important?

Business productivity serves as a functional assessment of individual, team, or company-wide effectiveness. And by figuring out the effectiveness, you can more easily identify areas and processes that can be streamlined. 

Streamlining could be done by prioritizing tasks, improving time management, investing in new technologies, and other methods. You can also use business productivity to reduce employee idleness, form new plans and methods, improve workflows, and more.

The most common metrics of business productivity are:

  • Time management – This includes labor productivity and can be exemplified in the amount of output a single employee generates per hour or a ratio of the total output against the total number of work hours. 
  • Customer retention and satisfaction – Happy customers are more likely to become repeat customers and share their positive experiences with others (refer your business to new customers).
  • Profit margin – The difference between net profit and total revenue. It’s used to illustrate the company’s ability to effectively convert sales into profit.
  • Time-to-market – Defines the exact time it takes for a product or service to become available on the market. 
  • Sales growth – The increase in sales revenue over a specific period. It represents how effectively a company's customer base and market share grow.

Note that the business productivity metrics you want to use should align with your company's goals, industry, nature of business, specific market conditions, etc.

What Can a Business Do to Improve Its Productivity?

Hopefully, there’s no doubt left concerning the importance of business productivity and how improving it can benefit your company. 

To help you get a firm handle on the situation, we’ll share the eight top strategies and metrics with which you can boost your business productivity.

What Can a Business Do to Improve Its Productivity?

1. Utilize Technology to Improve Business Processes 

Staying on top of new technologies and leveraging them to your advantage is a surefire way to improve business productivity. For example, using time-tracking apps allows you to streamline various procedures, such as:

Moreover, modern technology can save you time (and, in turn, money) by simplifying procedures such as:

  • Managing and analyzing data;
  • Monitoring media, also called social listening; 
  • Social engagement;
  • Generating customer satisfaction reports;
  • Business development and growth;

Regardless of your niche, one thing is for certain — there will always be industry-specific software that will help you manage and improve numerous facets of your business processes. And, if there isn’t one yet, rest assured, someone is working on it right now.

2. Analyze Current Business Procedures

It can be difficult (there we say impossible) to streamline business processes if you aren’t sure what exactly needs improving. That’s why analyzing your current procedures to identify areas ripe for improvement is vital to increasing business productivity. 

And, while you review your current operational structure, be sure to keep in mind the following things: 

  • Are numerous tasks falling into the hands of a single employee, causing project bottlenecks?
  • Do some departments, teams, or individuals need additional training?
  • Do you need to acquire additional resources (both in terms of workforce and equipment)?
  • Are your overhead costs too high? Maybe it’s time to think about going fully remote or hybrid.

Another thing that you can do is ask your staff for feedback and comments about your current business processes. You can do this by administering an anonymous survey across your company or having an official team meeting.

If you can, try to connect with other industry leaders (yes, even your competitors) and ask them about their procedures. Having multiple perspectives on the same issue can allow you to improve your analysis and more easily spot what needs improving. 

3. Keep Time Wasting to a Minimum

Time wasting can significantly stifle the productivity of individual employees. And, when the efficiency of individual employees drops, you can bet that it will negatively affect your business productivity.

Here are some of the most common time wasters, along with tips on avoiding or dealing with them successfully. 

  • Holding team meetings – Even though they can be a valuable resource and are generally considered good, team meetings can be a huge waste of time. To deal with this issue, try and curb the amount of meetings as well as the number of people who attend them. Hold meetings only when it’s unavoidable, ensure they follow a clear schedule and agenda, and, we can’t stress this enough, set time limits for each talking point.
  • Sending emails – The main fault of emails is that they are commonly considered a formal type of communication. Because of that, they’re not the most time-friendly way of sharing day-to-day information. To fix this, you should try implementing a work messaging app, a project management software that allows for intrateam communication, or any other digital solution that best fits your needs.
  • Lack of company-wide consistency – Organizing and optimizing workflows can ensure everyone in your company is on the same page when it comes to daily work obligations, and it promotes uniformity and consistency. And, more importantly, it can save you a lot of time. One of the ways that you can achieve this is by creating a timesheet policy.
  • Employees that procrastinate – Procrastination is one of the biggest time wasters, period. A great way to deal with this is to help your employees improve their time management efficiency. You can do that by setting up effective time-tracking practices.
  • Scrolling on social media sites – According to some statistics, an average person spends around 151 minutes a day on social media. You can’t stop people from doing that in their free time, but you can stop them when they're on the clock. The best way to do this is to set up a policy addressing this issue and imposing consequences on any employee who disregards it. 

4. Invest in Employee Well-Being

According to numerous studies, employee well-being (especially when it comes to physical and mental health) can have a significant positive effect on productivity and can reduce or even prevent burnout. 

So, if you’re once again asking: What can a business do to improve its productivity? One of the answers will most definitely be to invest in employee well-being. Why? It's simple – a more productive workforce directly translates into improved business productivity. Let’s outline a couple of things you can do to improve the well-being of your employees.

  • Establish wellness programs by offering employees paid gym memberships or fitness classes;
  • Keep healthy snacks and meals in the workplace;
  • Encourage breaks;
  • Offer hybrid or  remote work options;
  • Invest in time-tracking software and encourage employees to use it;
  • Offer additional paid time off to high performers;

If you’re unsure which of the above to implement in your company, don’t worry; just ask your employees for feedback. Communicate with them to create the most impactful and beneficial wellness strategy. For instance, if certain employees feel like they would be more productive in a remote work setting, you could create a remote work policy that allows for one or two work-from-home days each week. 

5. Promote Professional Growth of Employees

Encouraging employees to develop new skills and improve current ones will not only help them become better business professionals but will also positively impact your business productivity. Provide your employees ample opportunity to take on new professional challenges, invest in their training, send them to seminars, etc.

6. Steer Clear of Multitasking

According to some studies, multitasking can negatively impact the productivity of individual employees. Putting multiple tasks on someone’s plate can affect their ability to produce quality work and make them feel overwhelmed and burned out. Ensuring that employees have an equal (or as equal as possible) workload is an excellent way to have first-class team cohesion, morale, and productivity. Keep that in mind, and your business productivity will surely improve.

7. Set Clear Goals and Priorities 

Having clearly defined business goals while effectively communicating them to your entire workforce can improve business productivity. It can ensure that all of your employees are working towards achieving the same goal, further allowing for better prioritization of tasks, more favorable business outcomes, and better overall unison amongst your company’s staff. 

To set clear business goals, you can utilize the popular SMART goals method. The acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound goals. Following these criteria and structuring your goals to fit within them can increase the likelihood of success, create a more focused approach to achieving your company’s goals, and ultimately increase business productivity. 

8. Promote a Positive Work Culture

Promoting a positive work culture and environment improves business productivity. This is because it directly impacts employees' motivation and engagement levels, which are both fuels that can add up to their overall productivity levels. Employees who feel valued and satisfied with their work environment will be more likely to give it their all. Here are a few ways to promote a more positive culture at your company:

  • Foster open communication – Encourage transparent communication between employees and management. Ensure that all your employees know that their feedback is valued and that they feel comfortable sharing their views, concerns, and suggestions.
  • Reward good performance – Acknowledge and reward employees who perform at a high level. You can do so by praising them, giving them bonuses or company awards, promoting them, or giving them a couple of extra days off to show appreciation for their good work. 
  • Hold team building events – Team building can affect team morale, cohesion, and overall productivity. By organizing team-building activities, you can foster positive relationships among team members, leading to a more friendly work environment.