While putting in extra hours may seem like the right solution to increase productivity in your organization, you might end up with the opposite.
Recent research shows that working long hours doesn’t necessarily result in better productivity. On the contrary, countries outside of the US where employees worked fewer hours ranked better on the productivity scale and had a higher per-hour output.
So, if overtime isn’t the answer, what is? Read on to find out why overtime is harming your operations rather than helping them, and to discover some better ways to maximize efficiency within your organization.
Why is overtime so bad for productivity?
Each country has its own labor laws and regulations that protect employees. Every organization with at least one employee needs to have a clearly displayed labor law compliance notice that outlines the compensation, break compliance, and PTO.
However, even if your overtime is regulated to the dot, you can still expect some side effects:
- High chances of burnout
- Higher employee turnover
- A decrease in work-life balance
- Lower per-hour productivity
- Higher absenteeism and presenteeism
- Safety concerns
Working long hours is not a sustainable approach to productivity — here are some better ways to boost operational efficiency.
6 ways to improve operational efficiency
1. Analyze past performance and set a baseline
Your first step to boosting productivity and operational efficiency in your organization should be analysis. Once you have a clear understanding of your past performance and output, you can set benchmarks and targets for future projects.
By setting this baseline, you can track progress and measure the success of your efforts against it.
When it comes to overtime and productivity, measuring the total output might give you the wrong results. The best way to measure productivity is output divided by input. In this way, you’ll get the actual per-hour output and see if your staff is just working longer, but not more.
2. Track the right metrics and output
Setting SMART goals and choosing the right metrics and KPIs for the job role is the second way of boosting operational efficiency in an organization.
Operations within an organization will vary from one industry to another. For instance, the steps required to improve operations in retail will be different than in a hospitality business. However, tracking the right metrics against your baseline is a must, no matter the niche.
Instead of winging it, a data-driven approach will help you make informed decisions for both long and short-term goals.
Ensure that your KPIs are realistic in terms of work volume, frequency, and time. For instance, hybrid retail stores might need to set different goals and ways of measuring foot traffic vs. digital traffic. Similarly, the conversion rate between brick-and-mortar and online stores will differ, so be aware of this before setting goals and KPIs for your staff.
Define the best performance metrics, KPIs, short, and long-term goals to track for all your main job roles. Then, start comparing the results with your baseline from step one.
3. Automate and standardize processes using technology
Documenting and standardizing repeatable processes will ensure consistency and increase efficiency. You can start by analyzing different processes and documenting them in a way that’s shareable and transferable to your team.
Standardizing your most important processes ensures that everyone is on the same page and reduces the risk of errors. Additionally, it makes onboarding new hires much easier since this documentation can then serve as a training guideline.
Another important tip is to look for tools and software to automate repetitive and time-consuming tasks — such as data entry, staff scheduling, or invoicing. These tools not only save time but also reduce errors and improve accuracy.
However, be careful when introducing new technology — everyone concerned has to know how to use it properly in order for it to actually drive productivity.
4. Identify and refine workflow bottlenecks
Identifying workflow and process bottlenecks is essential to increasing operational efficiency.
Start by mapping out the workflows of different departments and the way in which they merge into the final product.
Then, identify areas where work is piling up, becoming delayed, or resources are being wasted. Once you have identified these bottlenecks, work with your team to find solutions.
Depending on the issue at hand, these solutions might involve delegating tasks, streamlining processes, updating software or implementing new ones, or adjusting your organizational priorities.
5. Improve cross-department communication
How different departments communicate and collaborate can immensely affect the productivity of a whole organization.
Often, departments are consumed with their specific role or project, and fail to understand the role of other teams or individual team members. This can be due to conflicting goals, a lack of overall vision, or ineffective communication.
Perhaps the best example of this is on the frontline, where management often struggles to communicate effectively with workers who don’t operate in an office and don’t have access to technology 24/7.
Facilitating cross-departmental communication with the help of tools and different programs and strategies can greatly boost operational efficiency and staff productivity.
6. Provide continuous learning and training opportunities
Learning and development programs are a great way to improve employee wellbeing in an organization. Needless to mention, employee well-being and satisfactory work-life balance always result in higher productivity levels.
Additionally, by providing your staff the possibility to upgrade their knowledge, upskill, or reskill, you keep them engaged and highly motivated. Lastly, the employee becomes more competent at their job role and becomes more productive by default.
Here are some practical ideas for better learning and training efforts:
- Implement learning in the flow of work
- Use microlearning practices
- Try to personalize the learning experience as much as possible
- Improve your onboarding process to better prepare your new employees
Let's get productive
Boosting operational efficiency is not a one-time activity — it’s a complex process that needs to be examined and restructured step by step. It might take time, effort, and organization, but it’s well worth it in the end.
Ultimately, overtime will not result in more productive operations. All it can do is bring down productivity levels even further.
Regardless if your goal is to scale, boost profitability, or improve customer experience, over-hours is not the best way to go. Instead, try one of our six practical ways to boost operational efficiency in your company.
Rob Press - Content Marketing Manager at Deputy
Rob is a content marketing manager at Deputy, a robust scheduling software that can be used to manage your workforce in a wide variety of different industries. Aside from helping businesses reach operational efficiency, he keeps up to date with the latest trends in SaaS, B2B, and technology in general.
