New data from the United States Bureau of Labor Statistics reveals a sharp decline in labor productivity, with a 2.7% decrease in output per hour for the nonfarm business sector in the first quarter of 2023. This decline is accompanied by a high rate of employee disengagement, with 68% of American workers feeling uninvolved and uncommitted to their work. The low engagement has been found to cost the global economy $7.8 trillion, or 11% of the global GDP. To address these productivity challenges, companies can invest in employee training, provide flexible work arrangements, and promote a positive work environment.
While some business leaders argue that in-person work is necessary for innovation and company culture, a study by Stanford University found that remote workers are actually 13% more productive than in-office workers. The decline in productivity may be attributed to a confluence of factors, including the Covid-19 pandemic, geopolitical and economic crises, supply chain disruptions, and the Great Resignation. In addition, low engagement and productivity can stem from factors such as job dissatisfaction, unclear expectations, lack of recognition, and toxic work environments.
To address these challenges, employers can provide financial assistance programs, create a positive and supportive work environment, offer growth opportunities, and provide mental health resources. Clear communication, goal-setting, regular feedback, and recognition are also crucial in fostering engagement and productivity. Employ must also address toxic behaviors promptly to maintain psychological safety in the workplace.