More than a third of working time is wasted

2005

Firms are failing in the most basic aspects of organisational efficiency, with more than a third of all working time wasted because of poorly planned and managed work or inadequate supervision of workers.

An international study of business productivity performance by Proudfoot Consulting suggests that executives, unions and governments are placing too little emphasis on dealing with the most frequent causes of poor productivity in companies.

The Proudfoot Productivity Report found that an astonishing 37 per cent of all working time is effectively wasted, on average. Three-quarters of this wasted time is a result of basics such as poorly planned and managed work or inadequate supervision of workers.

As part of the study, Proudfoot Consulting rated 150 meetings in 50 companies against a 'best practice' scorecard. Almost half had no agenda and in less than a third were participants prepared, with minutes captured. Only 12 per cent resulted in a clear set of next steps.

According to the report, the findings highlight how even larger firms are failing in the most basic aspects of organisational efficiency.

A parallel survey of 800 senior executives carried out for the report also shows that business leaders are aware of these barriers but have so far failed to tackle them effectively, and that they believe better performance requires increased capital investment.

But with poor labour productivity estimated to cost Britain at least £88bn annually – around 7.46 per cent of GDP - Kevin Parry, chief executive of Proudfoot Consulting parent MCG Group Plc, said that simply focusing on reducing the two main causes of wasted working time identified in the report it could give the UK economy a huge boost.

"Tackling ineffective management and work processes, and improving worker supervision may not be glamorous but they are certainly the fastest and lowest cost routes to higher output and financial performance.

"The report leads me to the conclusion that interest groups, however well intentioned, are nonetheless busy doing the wrong things."

Britain's productivity gap with the rest of the world has narrowed in recent years but British employees produced an average 10 per cent less than workers in the rest of the G7 industrialised nations in 2004, and 24 per cent less than those in the US, according to latest ONS data.

"Running things well matters at least as much as investment in attaining strong productivity performance but business leaders still seem not to have fully grasped this," said Nicholas Crafts, professor of economic history at the London School of Economics in the foreword to the report.

"This study shows that waste of labour is pervasive: in all countries where the cost can be quantified, it is at least 5.9 per cent and in some over 9.7 per cent of GDP," he added.

"Addressing this issue could make a major contribution to 'having it all' in the sense of working relatively few hours without paying too high a price in terms of foregone income. Proudfoot's research makes a key contribution in that it heightens awareness of this opportunity. It is up to management to seize it."

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