Executive Briefings

We're Much More Productive Since the Recession Began, But It Isn't Entirely Clear Why

It's no secret that productivity has shot up since the beginning of the recession. One measure, profit per worker, increased by more than 50 percent between 2009 and 2011. It now stands at what is at least a 10-year high of $15,278, according to recent data from Sageworks, which aggregates private-company financial information.

Exactly how and why those improvements have come about, though, is a matter of some debate. Are companies asking existing workers to work harder, so they don't have to hire more people? Are they outsourcing more jobs to shrink the payroll? Are machines taking over processes that humans once handled?

A new survey by Deloitte of CFOs and other executives at middle-market companies sheds some light on the issue. A full 70 percent of the nearly 700 survey respondents said they've seen productivity improvements in the past three years, with about half of those reporting gains of 5 percent or more. Respondents attributed the gains largely to improvements in business processes and technology. "The responses would suggest that there's a real emphasis on using technology to increase productivity and make individual workers more efficient," says Tom McGee, national managing partner for Deloitte's growth enterprise services division.

Among the technology investments, business-process automation tools ranked first in boosting productivity scores, followed by business-intelligence tools. Robotics came in last, cited by only 10 percent of respondents.

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It's no secret that productivity has shot up since the beginning of the recession. One measure, profit per worker, increased by more than 50 percent between 2009 and 2011. It now stands at what is at least a 10-year high of $15,278, according to recent data from Sageworks, which aggregates private-company financial information.

Exactly how and why those improvements have come about, though, is a matter of some debate. Are companies asking existing workers to work harder, so they don't have to hire more people? Are they outsourcing more jobs to shrink the payroll? Are machines taking over processes that humans once handled?

A new survey by Deloitte of CFOs and other executives at middle-market companies sheds some light on the issue. A full 70 percent of the nearly 700 survey respondents said they've seen productivity improvements in the past three years, with about half of those reporting gains of 5 percent or more. Respondents attributed the gains largely to improvements in business processes and technology. "The responses would suggest that there's a real emphasis on using technology to increase productivity and make individual workers more efficient," says Tom McGee, national managing partner for Deloitte's growth enterprise services division.

Among the technology investments, business-process automation tools ranked first in boosting productivity scores, followed by business-intelligence tools. Robotics came in last, cited by only 10 percent of respondents.

Read Full Article