In 2024, improving employee efficiency is the top priority for every business — and for good reason. Efficient employees can drastically improve the speed at which we complete tasks, the way we set project scope, and overall company profits. 

However, improving employee efficiency goes way beyond ensuring that employees work every hour at their work desks. Boosting efficiency is more about engaging your employees and understanding the issues hampering their productivity. After all, statistics reveal that engaged employees are 14% more productive and 23% more profitable.

In this article, we will discuss employee efficiency and offer proven strategies on how to improve the efficiency of employees, helping you create an engaged and productive workforce. 

Let’s dive in by first understanding employee efficiency. 

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Understanding Employee Efficiency

Employee efficiency refers to the productivity of an individual employee or team within your organization. It is often measured by the quality of output you are getting from specific individuals relative to the input.

Several factors affect employee efficiency on a micro level, such as a positive work environment, personal motivations, level of engagement, satisfaction, and competencies.

Importance of efficiency in the workplace

The importance of having an efficient, engaged workforce cannot be overstated. According to research by Gallup, the U.S. economy loses over $600 billion annually as a result of inefficient and disengaged employees.

Efficiency in the workplace ensures employees do the right work in the right manner, maximizing the organization’s output while minimizing input.

Additionally, there are several other benefits of employee workplace efficiency:

  • Employees and teams can easily meet deadlines and complete projects at a faster pace.
  • Resources allocation is more efficient due to better use of time and effort
  • Workplace efficiency can reduce fatigue and burnout — issues that can then lead to health problems and absenteeism

Above all else, boosting employee efficiency leads to happier employees, which has a positive impact on employee experience, retention, and engagement.

Assessing Current Efficiency Levels

Assessing the current employee workplace efficiency levels is crucial as it allows businesses to determine which employees are productive and which need improvement. By regularly tracking employee efficiency and productivity, companies can make strategic changes to their regimented style of functioning and better utilize their employees’ potential.

Many companies use a simple employee efficiency formula to measure efficiency: Working hours/ Total hours worked * 100

The higher the result, the more efficient the employee will be.

Efficiency formula

(Standard Labor hours/Amount of time worked) x 100 = efficiency

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There are a few other ways to measure employee efficiency. Time tracking, task completion, and output metrics are the three most widely used methods. Let’s look at them in detail below:

1.       Time Tracking

Time tracking measures how long it takes an employee to complete a specific task. By using time reports, you can determine the amount of time a task takes, detect patterns, understand work rhythms, and make informed changes to improve employee efficiency and productivity.  

Now there are several types of time-tracking techniques, from basic methods like relying on spreadsheets to using dedicated time-tracking software and automated timesheets. The latter is a much more reliable and secure way as it offers real-time visibility into how efficiently employees perform their tasks.

With this software, companies can also gather information like:

  • Clock-in and clock-out times
  • Overtime hours worked
  • Percentage of work completed within a target range
  • Time spent on assigned tasks
  • Workforce analytics
Criteria and benefits of time tracking

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2.       Task Completion

This technique to measure productivity calculates the number of tasks an employee completes in a specific period. The method is typically used when an employee has a high volume of small jobs to be completed, such as data entry or customer service.

To calculate the task completion rate, divide the number of tasks completed by the total number of assigned tasks. This is a quick and easy way to evaluate the efficiency of each of your employees.

3.       Analyzing Output Metrics

Output metrics measure the outcomes of an employee’s efforts. This technique works best for roles that prioritize the quality of the work over the quantity, such as marketing or sales. Calculating output metrics is easy. Simply divide the total sales or leads generated by the total number of hours worked.

It must be noted that increasing employee productivity is difficult. The best way to measure efficiency will always depend on the type of job role and objectives. However, utilizing these efficiency calculator formulas or investing in time tracking software can help businesses understand and optimize employee throughput.

Employee Performance Metrics for Assessment

Employee performance metrics help managers track how well an employee is performing their role. Here are some of the best metrics that come in handy for measuring employee efficiency.

MetricImportance
Quality of workEfficiency doesn’t mean much if the work employees are producing isn’t of quality. This metric checks factors such as attention to detail and accuracy to ensure the work completed meets the company’s standards.
Net Promoter Score (NPS)NPS collects feedback from stakeholders and colleagues to measure their likeliness to recommend the employee as a service provider or co-worker.
Quantity of workQuantity is important for assessing an employee’s output levels. It focuses on the volume of work an employee produces within a set period, such as the number of units produced.
% of individual goals and KPIs achievedThis metric quantifies the extent to which an employee has met their assigned goals and KPIs. It’s highly effective in improving employee efficiency, goal clarity, employee engagement, and strategic alignment with company objectives.
AbsenteeismAbsenteeism tracks an employee’s attendance and total absences from work. This, in turn, helps to evaluate the impact of absenteeism on team productivity and morale.
Revenue per employeeThis metric calculates the revenue generated by an employee within a specific period, which is a direct indicator of productivity.

Strategies to Improve Employee Efficiency

Once you’ve identified areas for improvement, it’s time to think about a solution. Here, we’ll discuss important strategies for building an efficient workplace.

1.       Enhancing workplace environment

Work environment plays the most critical role in affecting employee workplace efficiency. A happy and positive environment nurtures motivated employees who are more likely to be efficient.

Strive to practice transparent leadership where every employee’s ideas and opinions are heard and valued. This also helps to boost employee morale. Offer flexible work policies to accommodate diverse needs and preferences, such as flexible hours or remote work options. Contrary to popular belief, these arrangements can actually increase productivity.

Additionally, it encourages employees to socialize with one another. This can help build meaningful relationships which are essential for a productive workplace.

2.       Implementing effective training programs

Offering regular training to your employees is a crucial aspect of preparing them for the job. The more prepared they are- the more efficient they are likely to be.

According to a report by Gallup, 88% of employees feel that their employers did a poor job with their onboarding and training process. Not paying adequate attention to employee training and onboarding can lead to dissatisfaction and loss of workplace productivity. So make sure your employees are given adequate training that familiarizes them with your company’s internal tools and processes.

Additionally, you can provide regular skill development workshops, seminars, and access to online courses for your employees. This will not only enhance their personal growth and make them more efficient and productive in their job roles but also boost job satisfaction.

3.       Setting clear goals and expectations

Employees can seldom be efficient if their goals are not clearly defined and achievable. Goals are the lifeblood of ambitious employees, giving them something tangible to strive for. So, make sure each employee’s targets are as clear and well-defined as possible. Also, let your employees know exactly what you expect of them and how those expectations can help them and the company as a whole. This will also help to manage remote workers more efficiently.

You can utilize the SMART goal-setting strategy to improve productivity and workplace efficiency. SMART goals translate to Specific, Measurable, Attainable, Relevant, and Timely. Before you assign any task to an employee, make sure it fulfills the SMART requirements for the best outcome.

SMART Goals

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4.       Utilizing technology and tools

This is one of the best tips on how to improve efficiency in a business. Utilizing tools and technologies for various business operations can empower employees to do their jobs more efficiently.

“Embracing tools and technologies to improve employee efficiency isn’t just about staying competitive. It is about empowering your employees to reach their full potential and drive unprecedented innovation.”

[Vineet Gupta, Founder of 2xsas]

For instance, communication and collaboration tools like Slack can incentivize cross-team collaboration to discuss and share ideas on the go. Similarly, project management software such as Asana can help your teams better manage project stages, deadlines, pending tasks, and other productivity goals.

Additionally, there’s also an array of tools available that can simplify everyday mundane tasks and improve employee productivity. For instance, AI text to speech tools can quickly convert text into spoken audio, enabling employees to listen to written content while performing other tasks. Presentation or proposal makers can make your salespeople’s lives a lot easier. All this can contribute to an efficient workplace and faster achievement of goals.

Examples of Improved Efficiency in Action

Many organizations are now implementing strategies to boost workplace productivity, ensuring employees spend their time on more crucial tasks. Let’s look at some real-world examples of companies that have achieved notable improvements and successfully built an efficient workforce.

Google’s 20% Time Policy

Google, the leading tech giant, has always been widely lauded for its efficient workplace structure and many innovative approaches to maximizing efficiency. One of them is their concept of “20% time”, which has helped foster creativity and innovation among its employees.

According to the practice, Google encourages its employees to spend 20% of their time (or one day every week) working on projects of their choice, completely unrelated to their regular job responsibilities. This flexibility and creative freedom enables them to explore new ideas and collaborate with other employees across the company.

This incredible concept has not only significantly boosted employee work efficiency and innovation but also led to numerous innovations, such as Gmail and Google News. It also demonstrates Google’s faith in employees’ skills, which further leads to the company’s success.

The value of 20% time

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Microsoft’s Learning Programs

Another company that has demonstrated how to improve employee efficiency is Microsoft. The company recognizes the value of continuously investing in employee training and development to enhance their technical skills and knowledge.

Microsoft’s Learning Program offers an extensive range of training courses and certifications to equip employees with the latest industry knowledge. The company claims that equipping employees with advanced knowledge and skills can help them tackle complex challenges and boost their efficiency in the workplace. Their steadfast commitment to continued employee development has contributed to Microsoft’s success as a global tech leader.

Overcoming Common Efficiency Barriers

All employees, regardless of their position or department, are bound to face certain barriers. These barriers can cause delays, inefficient workflows, and decreased productivity.

Identifying and overcoming these difficulties is key to improving efficiency and ensuring an engaged workforce. Let’s look at a few common barriers to efficiency and actionable tips to overcome them.

1.       Communication and knowledge gaps

Every company must have open communication policies. When employees do not know who to ask for help or where to find what they are looking for, there is a lot of unnecessary delay. Additionally, the presence of tribal knowledge (or knowledge gaps created by lack of documentation) can also create undue knowledge gaps.

Having a comprehensive knowledge base with detailed information pertaining to each department is a must. Additionally, managers must maintain an open line of communication with their employees to eliminate delays and boost efficiency.

2.       Inefficient workflows

Another roadblock that hampers employee efficiency is inefficient workflows. When employees don’t have visibility into their processes or are not familiar with their goals, it can lead to delays and affect the overall process flow. Also, unorganized workflows can cause unnecessary friction among employees, causing dissatisfaction and frustration.

Utilizing workflow automation tools can help to streamline processes, ensuring the smooth completion of each task.

3.       Excessive meetings

Meetings are a necessary evil in the corporate world. However, most of the time, they are seen as a waste of time.

Too often, meetings are held without a clear goal or purpose. As per statistics, employees spend approximately 31 hours in futile meetings every month. Such meetings block out valuable employee time so that they can work on more crucial business tasks.

So before calling any meeting, make sure there is an absolute need for the same. Consider if there is a more convenient way of communicating the topic rather than an employee meeting. Additionally, always start the meeting with a pre-defined time limit so it doesn’t drag on unnecessarily.

If you think an oversaturation of meetings is a key cause of your team’s inefficiency, check out Hubstaff Insights. You can balance meeting and focus time, see utilization rates, and categorize productive and unproductive apps as needed. 

Meeting time Hubstaff Insights

4.       Inadequate employee recognition

When employees do not receive the recognition they deserve for their efforts, they often feel overlooked. This negatively impacts employee morale, which in turn results in a decline in workplace efficiency.

A great way to eliminate this issue is to have a peer recognition program in place. This will allow employees to nominate their co-workers for recognition. Also, you must reward employees by recognizing their personal accomplishments and other milestones to show them the company values them. Even sending a thank you email can go a long way in ensuring employee satisfaction and boosting overall productivity.

Conclusion

Employees are the lifeblood of every business. However, if they become inefficient, the business is likely to suffer.

If your business is facing issues like missed deadlines, declining sales, or low morale, it’s important to take proactive steps to boost workplace efficiency and increase employee productivity. Remember to implement the aforementioned strategies like:

  • Enhancing the work environment
  • Establishing clear goals and objectives
  • Streamlining processing
  • Providing adequate employee training, 

With these priorities in place, you can create a culture of productivity and empower employees to reach their full potential.

Category: Employee Productivity