40 years ago, I moved to a new office in the accounting firm. A year or so later, I happened to run into a former client whose business had been growing quickly when I left. I asked, “How many people are working for you now?”
“About half I suppose.”
I thought that reply was quite witty and meant to be only that. Over the years I have found that it was likely true for him because it is close to true for others.
It is not that the employees work for themselves or someone else, although that could be a little true. It is that the system often prevents them from working at all, never mind for you.
Five or six years after the first encounter I happened to be having lunch with some people in the consulting business. One of them had just finished a major project that analyzed the productivity of the civil service in a South American country. He was very excited.
“Do you know that the average civil servant in XXXXXX spends 15 minutes per day working productively.”
The cynical reply. “What did you expect?”
“No! You are missing the point. If we can figure out how to get 30 minutes a day we could fire half of them. We modeled it. If we fired half of them, they could not possibly do so badly as 30 minutes productive from the rest.”
“There would be many fewer (and shorter) meetings and internal memos and expense reports and so on. Improved productivity would be a given.”
He was probably right but I don’t think they ever did the rest of the job.
A slightly undersized, well trained, well-equipped workforce is always more productive. There are many factors but one obvious one is the number of ways they can connect.
If you have 10 employees there are 45 ways to create pairs. Not everyone will say hello and ask about the family every day but the number of pairs is material. What if you have 40 employees? Now there are 780 possible pairs. Possible meetings of 3 people of 10 grows from 780 unique arrangements to 9,880 when 40 workers are available. Just for fun, there are 658,008 different 5-person meetings possible in a 40-person workforce.
Every system has non-monetary overhead that increases with the number of workers.
You can overcome some of the effects in simple ways.
Businesses that are completely unproductive, frequently try too hard to minimize socialization. It reappears in different ways. Usually absenteeism, group benefit costs, and turnover.
Others go cheap on technology. It is cheaper to have a faster network than to hire another person to accomplish the same work and to share the wait times.
Another sure sign of problems is frequent unstructured meetings. If you have a meeting with 3 people earning $50,000 each in salary, all cost in, a 2-hour meeting is likely going to cost about $600. How many meetings produce a result that is worth that much?
Most of lost productivity is just common sense. If you want to get better, ask the employees what makes their jobs harder to do. Then listen and act on it.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. firstname.lastname@example.org