Why invest on productivity?

Xpandis Tips

Why invest on productivity? It is well known that national productivity is below the EU average. In 2017, according to PORDATA, in Portugal, each worker produced € 21.6 on average for each hour worked. But in the total of the 28 countries of the EU this value amounted to € 39.9. That is, a difference 85% higher than the Portuguese average.

Productivity is not just about the efficiency of the productive or industrial component of the companies. In fact, it is influenced by all sectors within organizations, from administrative activities to core business operations. This means that many companies are losing productivity by worrying exclusively about productive needs and giving less attention to business support. So beware of improving the administrative productivity of your organization.

How much can you gain by increasing productivity?

Let’s look at an example. Let us assume that a certain administrative task is performed by two employees through manual processes, even if computerized, and that their operation represents 10 hours per month (5 hours each). The automation of this process could allow a time gain of 90%, or more, and we would accomplish the task in just 1 hour. Based on the conservative perspective that these employees earn a minimum wage of € 580, without feeding subsidy, we will have an annual cost of € 10,363.25 (simulator at www.pmesalarios.pt) per person, which gives appreciably an hourly cost of € 5.35. Which meant that, in the example presented, you would save about € 96 per month, or a saving of € 1,152 per year (2 employees x € 5.35 x 9h saved x 12 months).

Imagine replicating this example to many other company processes. The result will be many thousands of euros of savings!

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