In a new global productivity survey, South African companies have been classified as "high performers" and ranked fourth out of the 12 countries surveyed.
Proudfoot Consulting today published the results of its eighth Global Productivity Survey and says that 23% of the South African managers surveyed reported that their companies experienced productivity increases of more than 15% in 2007, classifying them as “high performers.” This ranks fourth in the High Performers table out of all countries studied.
Yet despite the relatively high level of performance over the last year, South African managers believe their companies are leaving significant productivity gains on the table. Local managers surveyed think their companies could improve their productivity by an average of 16.1% over the next two years, over two points above the global norm. However, those same managers believe the actual productivity gains realised will only be 10.5%, leaving almost 35% of the potential productivity gains untapped.
The survey included more than 1 250 comprehensive interviews with senior company officials with first hand day-to-day knowledge of productivity issues and performance in companies with annual turnover exceeding $100-million. Companies in 12 countries and six industries were included in the survey.
Some of the oveall findings include:
Staff shortages and Internal communication problems are the main barriers to productivity across the globe.
Companies across the globe see training as integral to driving productivity improvements and are set to invest heavily in training & development in order to drive productivity improvements.
In almost all cases, smaller companies are much less likely to be implementing change initiatives to drive productivity improvements.
Managers in Emerging Markets are much more likely to agree that their staff performance and incentive measures are aligned to corporate goals compared to those in North America and Europe.
Managers are generally upbeat about their company’s productivity – Globally, three quarters of managers believe their company’s general productivity is ‘above average’.
The Emerging Markets are where quick decisions are made.
Developing countries are embracing the concept of employee morale as a key driver of improved productivity.
Whilst a quarter of companies are outsourcing, 1 in 5 are bringing activities back in house; are we seeing the end of the outsourcing culture?
With regard to the top five barriers to improved productivity, workforce issues are high on the agenda.
“Staff shortages and insufficient labour pools are having a significant negative impact on productivity, particularly in the southern hemisphere, with 48% and 37% of respondents in Australia and South Africa recording this as the main contributor to inefficiency,” says the CEO of Proudfoot Consulting, Luiz Carvalho.
Although internal communication issues were identified as the second leading barrier to improved productivity worldwide, this is not the case in South Africa. Only 20% of South African managers identified these issues as a key barrier, ranking it sixth in the market. By contrast, managers in Brazil (47%) and Spain (39%) ranked this the number one barrier to improved productivity in their markets.
The number three barrier to productivity identified by managers in South Africa is the quality of supervisors where 31% of South African managers identified this as a key barrier, the highest level of response seen in any of the markets surveyed. This suggests management initiatives to improve productivity in South Africa need to expand their scope beyond a worker-centric focus.
High staff turnover and low employee morale are also viewed as having a negative effect on productivity in South Africa. However, South Africa ranks second in the share of managers whose companies plan to invest in programs to boost staff morale (71%), and the market reported a higher level of companies (75%) planning to embrace a performance methodology such as Six Sigma or Lean in South Africa in the coming year than in any other market surveyed.
“While we see communication issues as a challenge in South Africa, other regions feel that it is even more of a hindrance to their performance than in South Africa,” says Carvalho.
Communication to the workforce at large is seen as a particular issue; only two thirds (67%) of South African managers agreed that it is easy to communicate to the workforce. This level is lower than all other countries studied and 10 points lower than the global norm.
The legislative environment was also identified by one-third of South African managers surveyed as a key barrier their businesses’ productivity.
When queried on their priorities for improving productivity in the coming year, nine out of 10 South African managers (91%) reported that their companies plan to invest in workforce training in 2009. This is more than any other country studied and 10 points above the global norm. It is going to be hard for South African managers to see the return on their investment, since only 46% of managers reported that their companies formally and regularly assess the effectiveness of staff training; this is the lowest level of all countries studied and 17 points below the global norm.
“It is significant that training is so high on the agenda for companies in South Africa, given that workers in South Africa already receive more days of training than their counterparts in any other country studied (16 days on average). Yet a fifth of companies in South Africa find that their general workforce is unable (23%) and unmotivated (20%) to adopt change programs; this highlights one of the key challenges facing companies which want to drive improved productivity, ” says Carvalho.
In the Communication sector, some key findings of the survey include:
Communications sector managers believe their companies could potentially increase their productivity by 15.0% over the next two years, the second highest potential productivity gains among the sectors surveyed.
More than a quarter of Communications managers (28%) say high staff turnover inhibits their efficiency, making this the number one productivity barrier in the sector.
The other top barriers to improved productivity cited by Communications sector managers are the inability of general workforce to adopt change programs (24%), misalignment of corporate goals and objectives with staff performance or bonus metrics (23%), a lack of desire among the general workforce to adopt change programs, a lack of training for the general workforce, the quality of supervisors, external communication problems, and outdated equipment; (all 22%).
Communications managers surveyed identified the lack of general workforce training as the leading barrier to improved productivity in the sector.
28.9% of Communications managers think there is too much bureaucracy and red tape in their company.
The Productivity Report reveals the most commonly observed barriers that prevent companies from improving their productivity and provides data on key worker and supervisor activities. Trends in the researched industries can also be identified from the published data.
More information on the report is available on www.proudfootconsulting.com/productivity.