How Strategic Hires Increase Revenue and Productivity

February 11, 2020
Author: ThinkWhy Staff

Like the late comedian Rodney Dangerfield, human resource (HR) departments sometimes “get no respect.” But obviously they should – especially if your goal, as a leader, is to boost your company’s revenue and productivity.

Hiring the right people creates a more efficient workplace.

How can you do that? One way is to encourage HR to become a true business partner by treating its functions as critical to business productivity. When HR pros are empowered with data-driven analytics and insight, they can make better hiring decisions and strategically contribute to the organization.

Great hires retained over the long term are a key to boosting productivity. Here’s why.

Understanding Productivity in the Workplace

Productivity is shaped by the manner in which resources are used to create goods or services. The change in output over time divided by the change in input over the same period yields the productivity level. Logically, increases in productivity allow for greater output, which, in turn, leads to stronger business results.

In other words, doing more with the same will increase productivity in the workplace.

For example, in Q3 2019 per the U.S. Bureau of Labor Statistics, national non-farm business sector labor productivity decreased by 0.2 percent because the increase in hours worked (2.5 percent) was greater than the increase in output (2.3 percent).

However, from Q3 2018 to Q3 2019, productivity increased by 1.5 percent. This boost reflected a 0.8 percent increase in hours worked over that period with a 2.3 percent increase in output. As long as the increase in output exceeds the increase in hours worked, productivity will climb.

Business productivity is contingent on labor productivity. Ensuring great employees are happy and empowered to work in the most productive way means hiring for the right skills, personality and culture fit — and then incentivizing those workers so they’ll want to remain with your company.

Companies can boost the productivity of their workforce in a number of ways. Among them:

  • Delegate. Give your most trusted employees more responsibility.

  • Use top equipment. Great tools like time-tracking apps, for example, will help your employees work more efficiently.

  • Deal with distractions. Allow workers to check social media during breaks, but otherwise urge them to turn off their phones.

  • Quit multi-tasking. It crimps productivity, so encourage employees to focus on one thing at a time.

  • Create a great environment. Employees are happier and more motivated in a comfortable, positive-feeling office with a team-oriented culture.

  • Boost employee satisfaction with perks. From free haircuts and massage rooms to gym memberships, the little extras will increase employee loyalty.

Resolve to Hire the Right People

Businesses formally celebrate increases in productivity by rewarding employees with benefits like higher wages. Salary increases often persuade employees to continue a job well done or work even harder, which keeps the productivity ball rolling, which leads to higher profits and greater employee rewards.

While making strong, strategic hires is always the goal, the mission is often complex. The competition for talent is fierce, particularly for the tech sector and the nation’s fastest-growing occupations. And with a national unemployment rate of 3.6 percent, filling open positions in a tight labor market poses challenges.

Failing to make the right hire, on the other hand, is time-consuming and expensive, resulting in lost productivity and revenue.

At the end of the business day, great talent will get the job done. But at the end of the business year, strong, strategic hires will help boost productivity to new levels. And that means you, as well as your HR partners – unlike poor Rodney – will be getting plenty of respect.

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