SME Productivity calculator
23 October 2019
What is productivity?
In its simplest form, productivity is a measure of the amount of output a business produces for a unit of input. Labour productivity measures the amount of output produced per worker. Higher productivity means that a business produces more output for each worker it employs.
Why is it important?
Improving productivity means you can produce more from the same level of input. This has a direct impact on business profitability and the living standards of its employees.
But despite the importance of productivity improvement, research shows that many businesses don’t know what productivity is, don’t know how to measure it or claim they don’t have the time to measure it (1).
How do you measure it?
There are numerous ways to measure productivity, some of which we outline in our recent blog – Key productivity metrics and how to measure them.
But if you have never measured productivity in your business, then the tool below, from the Office of National Statistics, offers a good starting point and allows you to benchmark your business against others in the UK. (For more details on how you collate the figures for each box, click on the definitions tab).
What do you do with this information?
We recommend that you use this is as just a starting point. It gives you an idea your relative productivity, but it is a blunt measure.
If you are serious about improving productivity, you first need to choose metrics that are relevant and important to your business and then undertake a programme of process improvement to stimulate productivity growth.
(1) Close Brothers, The Power of Productivity Measuring, understanding and improving productivity for SMEs, (January 2018)
- Key productivity metrics and how to measure them
- 5 signs that your processes are holding you back
- Why your business needs to embrace digital transformation
- 8 steps to process improvement for a growing business
- The three pillars of productivity: engagement
- The three pillars of productivity: integration
- The three pillars of productivity: process improvement