Wellbeing in the workplace to lift productivity
The Institute of Directors featured productivity as one of the top five issues for Directors to address in 2024 in its Boardroom Magazine. In this op-ed, Productivity Commission Chair, Dr Ganesh Nana considers how companies can approach wellbeing in the workplace to lift their productivity.
It has been famously said that a country is not a company. Nevertheless, while there are many ways in which they are different, there are many ways in which they are similar.
Companies, like countries, can be more productive if they become more efficient. A classic example of this is lean manufacturing, where we seek to reduce the “seven wastes” (over-production, over-processing, transport, inventory, motion, waiting, and defects). Whether you are Toyota or Tokoroa Transport, reducing these wastes enables you to compete with others on price and quality.
Productivity is not just about efficiency; it is also about growing value and to achieve and sustain success, companies need to build competitive advantage. A well-functioning and productive business ecosystem are integral to lift productivity. Such an ecosystem includes well-trained workers operating in a safe environment where innovative methods are welcomed.
So how important are productivity goals in the context of workforce wellbeing? This is best addressed together, with productivity and wellbeing being intrinsically linked in the context of people, place, and productivity. For companies, productivity success depends on continuous improvement, adaptability, and forward-thinking and wellbeing of their workforce and the place within which they operate.
Business capability has a significant impact on organisational performance. Skilled managers can increase productivity and profitability of their businesses by creating an environment that prioritises the wellbeing of their workforce – an environment where innovation and skill development can flourish.
Further, education levels, skills, and talent are fundamental to economic development, because highly educated, skilled, and talented people tend to be more innovative and productive. A highly skilled and educated workforce creates and embodies knowledge and ideas to facilitate the uptake of innovation from within Aotearoa New Zealand and internationally. Just as countries that invest in schools and universities are more successful, so are companies that build the skills of their workforce. Investment in a productive workforce is one key to lifting productivity, with a consequent positive effect on the bottom line. This means looking at a workforce as an investment over a period, rather than as a cost centre on a year’s financial statements.
Just as other investments – whether in new technology, machinery or equipment, or new product and market developments – the returns (ie. productivity gains) may not occur over an immediate financial reporting period. So, again like all investment cases, understanding and being transparent about the expected time horizon for returns is central for businesses. And similarly, investments in workforce enhancing skills, innovations, capabilities, and wellbeing, sow the seeds for productivity and prosperity for businesses, its people, and its place into the future.