How Employee Effectiveness Affects Your Business Growth

The primary business goal for small and midsize enterprises (SMEs) is growth: growing revenue, increasing customer base, product growth and/or location expansion.
Though the goal may not be revealing, the challenge SMEs face—i.e., how to achieve and sustain growth—is significant.
Our research indicates that employee effectiveness is the single most critical factor impacting an SME’s ability to achieve its growth goals:
Without significant improvements in employee effectiveness, about 70% of SMEs in Nigeria won’t meet their growth goals.

Why should SMEs strive to improve employee effectiveness?

When we ask SME leaders about their strategic goals, growth is the clear winner. Nearly 60% want to grow revenue, 43% plan to grow their customer base, 30% are looking to expand into new locations, and nearly 30% are going to launch new products.

Creating an effective, high-functioning workplace allows businesses to increase their output without increasing input by the same amount. Meaning that, by making employees more efficient, they can achieve growth without increasing the number of people employed or the number of hours worked.
The primary business goal for small and midsize enterprises over the next two years is growth: growing revenue, increasing customer base, product growth and/or location expansion.

Which industries face the biggest hurdle in trying to improve effectiveness?

Challenges stemming from trying to create and maintain a high-functioning workplace are not exclusive to any one market or business size; however, some industries are feeling these pains more acutely than others.
When we break the “Top Challenges to Achieving Business Goals” down by industry, trade-based industries report the greatest challenges with hiring and retaining workers.
An average of 23% of business leaders in these industries say “hiring the right people” is the single biggest impediment to achieving their growth objectives:

  • IT Services and software: 24%
  • Manufacturing: 22%
  • Construction: 22%

Similarly, an average of 18% of business leaders in these same industries say “motivating and retaining staff” is their single most critical issue:

  • Manufacturing: 22%
  • Construction: 18%
  • IT Services and software: 14%
employee effectiveness

Combined, that means that nearly half of these industries are struggling to find, hire, and retain workers.

What impact will gains and losses in effectiveness have on the marketplace?

Businesses that succeed at improving employee effectiveness will grow at the expense of those who don’t. They will gain a competitive edge and prominence in the marketplace.

With changing demographics, rapidly advancing business technologies, and an ever evolving business climate, we expect that building and retaining a highly effective workforce will continue to accelerate as a significant challenge to business growth.
The war for talent will have major ramifications—not just on construction, utilities, and manufacturing industries (and their consumers), but on every business regardless of size:

  • Employers should expect to pay higher salaries, improve benefits packages, and increase investments in skills training and succession planning.
  • Consumers should expect higher project costs, increased timelines and delays, reduced quality, and a higher potential for rework.

Furthermore, the challenges these SMEs face (skills availability, finding and hiring the right workers, then retaining them in increasingly cutthroat and competitive fields all while dealing with limited resources), means that improving labor productivity is more important than ever.

The old adage that, “you are only as good as your people” is more true today than ever before.

Companies that start today to create a culture of performance—by focusing on internal process improvements, by investing in the right technology to make existing workers more efficient, and by cultivating critical line and management roles—will pull ahead of those who hesitate.

How can SMEs improve employee effectiveness?

Take stock of your current levels of productivity, set goals for improvement, then continuously strive for “process with a purpose.”

There are many avenues to building a high-functioning workforce, including creating the right roles, attracting the right talent, providing the right tools, building strong leadership, and creating “process with a purpose.”

We have found that the most important is “process with a purpose.” This means creating an organization with a predominant mindset of continuous positive change, where you question the status quo that exists because “we’ve always done it this way,” and instead enact processes that optimize, not hinder, performance.

Of course, before you can improve upon something, you first have to take stock of where you are in relation to where you want to be. As such, small businesses need to first reflect on and analyze their current degree of effectiveness:

  • How productive are your employees? Survey them and ask for candid feedback about the biggest drains on their productivity, then take corrective action. Hint: Over 60% of an employee’s time is spent on non role-specific tasks such as running errands. The right tools in these areas can result in productivity gains of 20 to 25%.
  • Are employees overworked or underutilized? The sweet spot for productivity is between 70 and 80% utilization—exceed that and performance plummets. 
  • Do you have the right people in the right roles? Succession planning helps you find the future leaders of your company and give them the training, mentor-ship, and skills development they need to be ready to fill those roles.
  • Do employees have the right tools that help increase their output? Think about cutting grass with scissors, versus a push mower, versus a riding mower. They all get the job done, but the right tool enables the individual to do more work in less time and with far less effort.

Recommendations

Once you’ve bench-marked your current output, you can institute “process with a purpose” to help drive continuous positive change.

There are some critical elements that go hand-in-hand with a culture focused on “process with a purpose,” so we offer the following recommendations:

  • Foster a leadership culture that promotes accidental project managers who can drive operational change.
  • Create a workplace that is conducive to employee effectiveness in that it empowers and enables employees to be their best.
  • Understand key stakeholders and what success means to them to ensure that your employees are focused on doing the right things.
  • Build a leadership team that knows when it is time to change, what is the right type and amount of change and how to motivate people through that change.

How AGCSL Help?

  • Process Audit and Development
  • Strategy Modelling
  • Employee Audit
  • Recruitment
  • Training and Development
  • Structure Development

To get started, call 08092203388 to schedule a consultation with us or click the button below.

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