Understanding the Productivity Crisis (Part 1)

In recent years, there has been a growing concern about the decline in workforce productivity in the United States. According to a study by the Conference Board, U.S. productivity growth has slowed from an average of 2.5% per year in the 1990s to just 1.4% per year since 2000. Productivity has yet again found itself in the news more recently. A recent article from Fortune magazine stated that American worker productivity is declining at the fastest rate in 75 years, and that many executives are pointing the finger toward work from home (WFH).

However, before pinpointing the challenges and solutions to the productivity crisis, it’s important to take a step back and determine what productivity means and how organizations measure it.

“I think productivity is somewhat contextual,” said Future of Work expert Connie Steele. “The definition can vary depending on your industry or even the manager you work for.”

Some organizations might perceive productivity as the number of tasks completed, emails sent, or calls made, depending on the employee's role and the value they create for the business. Amidst these various metrics and benchmarks for productivity, the pandemic that began in 2020 threw another wrench into the way the business community looks at productivity. 

Measuring WFH Productivity

A May 2023 article by Rani Molla of Vox titled “Your boss is obsessed with productivity without knowing what it means” assesses the current landscape of various productivity definitions. 
The article mentions that according to a Slack survey, 71% of business leaders say they’re under immense pressure to squeeze more productivity out of their workers. However, the pandemic and remote work has clouded our ability to understand what productivity looks like. 
 
When employees work from home, there are extenuating circumstances to account for when analyzing productivity. These include differences in employees' home lives, how often they work from home, and whether or not their home setup is conducive for work. 

As a result of these factors, understanding the productivity of knowledge workers, meaning people whose job is to think for a living, is nearly impossible today, and the research being conducted is offering little help.

“The research on this really does seem to be a complete mess, not in the sense that it’s bad research but in the sense that you can find research that points at positive effects, be it productivity or happiness or job satisfaction, or you can find research finding the opposite,” Christoph Riedl, an associate professor of information systems at Northeastern University’s business school, told Vox.

With the data offering little help into understanding large-scale productivity trends, organizations are relying on metrics that don’t tell the full story. Many organizations (60%, according to the Slack survey) are tracking activity metrics — things like emails sent or hours worked — as the main way to measure productivity. However, this manner of productivity tracking only incentivizes employees to work longer and send more emails, it has no way of analyzing the value-adding capabilities of an individual’s work.

The current mindset for how we track productivity requires a shift that pushes employees to focus more on output rather than input, and for Connie Steele, this starts with meeting the needs of employees. 

"Folks want to feel that they matter. They want to know that they're valued. They don't want to feel like they're just a cog in the wheel." Steele said.

In the next part of this series, we will look at how organizations can shape an employee engagement strategy that simultaneously helps organizations track productivity correctly and pushes employees to be their most productive selves.