What Singaporeans need to know about the human dimension of productivity

Much research has been done across the world to understand productivity and its critical role in the economic well-being of nations.

Productivity is also at the heart of why people in a given economy can find it hard to accept that while the country as a whole seems to be doing well – when macro-economic indicators such as improved employment levels are held up as positive – ordinary people simply do not feel that the quality of their everyday lives is improving: the struggle to survive cost of living increases is a stressor for many and wages seem unlikely to increase anytime soon.

So one thing many people agree on is that wage growth is contingent on boosting productivity: the two things are inextricably linked.

In a country like Singapore then the productivity issue looks set to occupy centre stage as observers from the public and private sector seek answers as to why Singapore’s productivity has declined in recent years and more worryingly, why it looks like it will flat-line for the foreseeable future, according to projections (Singapore Productivity Forecasts by the US firm TradingEconomics).

Recent studies commissioned by the Ministry of Manpower have sought to shed light on what might be done to improve productivity and we will look at some of the recommendations for SMEs which have emerged from this research. As we do so, it might also be worth considering how productivity is not just a Singaporean issue – it is a global problem which will be exacerbated by future demographic shifts.

In a recent McKinsey report called Where to look for Global Growth (2015), the authors from the McKinsey Global Institute make the sobering assertion that unless productivity compensates for aging workforces around the world, the next 50 years will see a 40% drop in GDP growth rates and a 20% reduction in per capita income.

Some countries will benefit from the demographic shift (where their workforces are young – or young enough – to be able to support older retirees through sufficient or adequate taxation). Such countries include South Africa, Nigeria, and Turkey.

Countries likely to lose out as the so-called "demographic drag" starts to take hold include Canada, Saudi Arabia, and Mexico. It is clear that different countries with their different demographic and development profiles will require different and nuanced responses to the problem of how to maintain or boost productivity.

One element however – which runs as a golden thread throughout any response – is what we can call the Human Dimension of Productivity. The premise is that improved productivity can result as an output of leadership and management practices where these occur within the context of a positive corporate culture and a climate of authentic and frequent two-way communication between employer and employee.

Productivity sits alongside other positive outputs including discretionary effort, energy, commitment, and well-being. It is noticeable that the human dimension of productivity is often overlooked in favour of more "tangible" factors arising from analysing (manufacturing) systems and processes in a given organisation.

The reason for this is that finding a provable "cause and effect" that demonstrates a measurable benefit for productivity gains from the human dimension – is not easy to achieve. Nevertheless, by translating the "human dimension of productivity" into an examination of what makes for exemplary talent management practices for example, we can begin to get an understanding about how productivity can be positively affected by enhancing the way we attract and retain good people and critically, ensuring – to the degree that we can – that the experience of the individual in working for a given firm is an overwhelmingly positive one.

Anecdotally we hear that people don't leave organisations – they leave their bosses. Research studies and surveys across the globe (such as the Management Agenda, Roffey Park's annual look at workplace attitudes and organisational climate and the previously mentioned Ministry of Manpower study into talent management and productivity in Singaporean SMEs) provide a strong case for managers and leaders not only paying greater attention to the way they interact with their staff but also significantly improving how they go about painting a compelling picture of the type of organisation they are trying to build and its direction of travel.

CEOs in both SMEs and MNCs recognise the need to pull every lever they have at their disposal to boost productivity.

The name of the game is to move beyond systems and processes and think about some of those human elements: do we make a strong enough "connect" for people to see how performance and reward are linked? Have we explored ways to reward performance other than through base salary? Are we clear about how productivity gains could be made if only we understood the needs and drivers of performance for different age groups? And do we talk to our colleagues often and well enough to seek their views and opinions on how to energise the company?

These are some of the critical questions that lie behind the human dimension of productivity.