Addressing your productivity gap

30 July 2021


Productivity is a common pain point with small and medium businesses. But how can you tackle this challenge?

We’ve all felt a squeeze on our resources, but the demand for our services remains the same. This means it’s vital that we address our productivity gap.

What is the productivity gap?

A productivity gap is a benchmarking tool that compares your relative output to that of others. This could be reviewed in simple terms of turnover divided by headcount. This will provide your initial figure for the level of value an employee adds.

What we found was that as we grew, so did our productivity gap. Thus, reducing our profitability. We were inefficient and unable to scale our operations.

We’re not the only ones. On average, SMEs lose 20% of annual turnover to inefficient systems or processes. The equivalent of a day a week!

Where’s the gap?

Businesses need to take an approach of continuous improvement to monitor and manage business performance. This will help generate insight into time-sinks and other challenges that cause the business to be ineffective.

Start with a process map to understand the flow through your business. Track resources, interactions and systems to truly get to know how you work and, more importantly, what doesn’t work.

These issues could manifest as production delays, double entering data, poor cash flow control and much more. The key is to diagnose the issues first.

Filling the gap

Once you have diagnosed the issue, it’s important that you collaborate on the best solution with other areas of the business. Consider the far-reaching impact that a small change may have on other areas.

The solution could be as significant as implementing a new project management system to digitise your entire processes, or simply moving the physical location of a tool.

Mind the gap

Filling the gap could be the easiest part of the process. The real work begins when the solution is implemented.

You need to track the effectiveness of your solution. How much time have you saved? Consider what metrics you can use to track the impact that your action has had on the business.

Whether you’re tracking resource utilisation, on time and in full delivery, or project profitability, there are metrics out there that can help you identify the impact your actions have had.

Rinse and repeat

The productivity gap never disappears, but it may get smaller. There’s always remove for improvement if you look for it.

That’s why adopting key performance indicators that support this drive for reducing productivity will ultimately help your business thrive amongst the competition.


We’ve been on our own productivity journey, and we’re passionate about helping others reach their potential.

If you’d like to learn more about how to create a process map or how we can support your business in addressing your productivity gap, we’d love to speak to you.

Contact us