Why are Australia and New Zealand so low on the Productivity scale?

We are working longer hours, yet being less productive? New Zealand’s productivity is among the worst in the OCED and Australia is also way behind most comparable countries.

💡How do turn these challenges into opportunities? 💡

Here are a few reasons why our output is so low. We have combined the responses from a recent LinkedIn Post here (thanks to everyone who contributed!) and also include some resources below for further reading.

➡️ Red Tape!

Hurdles of regulatory requirements hinders innovation and productivity – just look at the construction industry!

➡️Lack of Investment in Technology

Or is this a low uptake, especially in SMB’s. This in turn limits their ability to access new markets, improve customer services and be competitive and streamline work processes. Anthony McMahon added a different lens; it’s not the lack of investment in technology, it’s the lack of investment in the right technology. For many companies the technology buying cycle tends to focus on the thing they think they need (or what the seller thinks, which is infinitely more problematic if the seller doesn’t understand the business). They then look outwards to see what’s there, when the solution may have been available already.

4 questions a business should ask themselves before jumping on buying tech:

– What’s the problem we’re trying to solve?
– Can we solve this with tools we already have? (Can one of the Microsoft 365 aps replace others?)
– Should we solve this with tools we already have?
– How else might we solve it?

Or as Steve Knutson pointed out – our small businesses focus on people, over tech. The size of New Zealand businesses is a factor to consider. Most of our businesses employee less than 5 people. Growing a business past 10-12 people means we need to cross the productivity vs overhead gap. This is really challenging because you start introducing overheads that reduce profitability until you scale up or invest in capital and R&D.

We tend to scale by adding people rather than investing in the technology amplifies our effort. Perhaps as country built on small business and agriculture, this is just part of our collective DNA? How do we change that mindset?

➡️Funding for research and development

This hampers innovation and competitiveness.

➡️The right people

In order to be productive, you need the skilled people available. A high proportion of the workforce have low or no qualifications. It is also difficult to attract and retain skilled migrants.

Mathew Gilbertson raised some thought-provoking questions to continue this topic:
– How much effort and resource have organisations put into helping their people get the most out of the tools they provide for them?
– Does workplace culture value, and drive ongoing technology skills development?
– Why do we assume people can establish productive workflows without expert coaching?
– Workplace engagement and productive outcomes have little to do with ‘where’ we work, it’s bound up in whether we are investing in people – or just new tools…
– Tools can’t solve problems, but skilled people can.

➡️Cybersecurity

It’s no secret that data breaches and cyber threats can throw a wrench in our productivity gears. With the right preparedness and detection capabilities, we can shield our businesses from digital dangers.

➡️Work Culture

It is about Quality, Not Quantity! Traditional employment contracts value hours over output. Perhaps post-covid the shift to focus on productivity has been happening – but is it enough?

Of course, some of these points are a little generic, taking stats, that are across an entire country. As Sharon Connolly said, there is a MASSIVE difference depending on your organisation, sector and within different divisions in a company. Staff of different demographics and in different roles will report different experiences and expectations.

In every organisation it’s important to develop everyone from where they are now, to where they want to be. People need to take responsibility for their own learning journeys too.

➡️Wellbeing

How closely are productivity and wellbeing linked? When we are happy, we produce more, but working more hours, causes burn out…it is a viscous circle.

➡️AI – The Future is now

It’s not all doom – AI is here, and ready to revolutionize the way we work. Imagine automating mundane tasks and boosting public services to new heights. The catch? We need a solid roadmap for AI adoption and literacy. It’s like embarking on a road trip – we need a map to reach our destination, which in this case, is a future where AI and humans work hand in hand.

➡️ What if we ALL improved just by a small %?

There was continued discussion around how much our economy would grow if each business increased their internal capability. As Mark Smith said, imagine if the New Zealand government set it as a mandate to enable everyone to increase their digital literacy by 30%; what impact would it have on the economy and people’s livelihood?

We could take a leaf from the Singapore government’s AI strategy and the Irish government regarding enabling business growth. These things would have a massive impact on productivity. And Dorje Mckinnon added, even having an improvement metric e.g. improve typing speed / accuracy 10% every year would add immeasurably to any organisation’s productivity.

Join the LinkedIn conversation here

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Productivity at DWC

Sydney Australia (31 July-1 Aug 2024)

The Digital Workplace Conference comes to Australia but once a year.

Register for:

We cover products such as Microsoft Teams, Planner, To Do, Copilot, Loop, Outlook, SharePoint and even Excel! These sessions provide the chance to learn something new, or just get some fresh ideas on enabling best use at your company.

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Resources

1. New Zealand productivity among worst in OECD – Productivity Commission report | RNZ News
2. NZ’s low productivity problem: Red tape has us tied in knots. https://www.grantthornton.co.nz/insights/nzs-low-productivity-problem-red-tape-has-us-tied-in-knots/.
3. Business productivity in New Zealand – nzier.org.nz. https://www.nzier.org.nz/hubfs/Public%20Publications/Client%20reports/NZIER%20Business%20productivity%20report%20FINAL%2022022024.pdf.
4. Low innovation and weak international connections limit productivity. https://www.productivity.govt.nz/assets/Documents/an-international-persepective-on-the-nz-productivity-paradox/a0bdc73d39/Media-release-Low-innovation-and-weak-international-connections-limit-productivity.pdf.
5. Not enough technology a key factor in stagnant productivity. https://istart.co.nz/nz-news-items/nz-tech-productivity-commission-report/
6. Weak Productivity Hals Wage Rise: Minimum wage will increase 3.75 per cent as Fair Work Commission worries bigger rise could fuel inflation (afr.com)

TAGS: PRODUCTIVITY, WELLBEING