Every day we hear of organisational failures, whether that’s private companies tipping over leading to heartache for everyone or budgetary blowouts in the public sector resulting in countless casualties.

 
While low demand and high interest rates are proving a challenge, much of the pain we’re experiencing in the workplace is a result of outdated practices being used to try and improve employee productivity to offset reductions in earnings.

Given labour is the biggest expense for the majority of businesses (typically 20-30%), it’s understandable why so many Executives around the world are trying to figure out how to manage their workforce in the years ahead.

As Gallup’s 2024 Workplace Report highlights, organisations are grappling with changes in labour markets and falling productivity. At the same time, changes in both macroeconomics and geopolitics have hampered confidence making it difficult for decision-makers to invest in anything other than plant and technology hence the interest in AI.

No matter how we look at it, current interventions are continuing to undermine employee engagement amounting to an estimated $8.9 trillion in lost GDP globally. Further to this, the number of disengaged staff has increased to 62% while the actively disengaged has risen to 15% meaning only 23% of the world’s workforce today are considered engaged.

If further evidence of the issue is needed, Gallup says employee well-being is now the worst it’s been since their surveys began even though they remind us that managers still account for a whopping 70% of the variance in their people’s engagement. In other words, it is clear that organisations have not only failed to keep pace with the market, they have failed to equip their managers with the tools to help their staff succeed resulting in further dissolution of the relationship and a subsequent decline in their contribution.

So what’s the answer?

As obvious as it sounds, the key to correcting the issue is for organisations to become people-first, purpose-driven businesses.

Why? Because it allows leaders to reorientate their organisation so their staff are focussed on critical outcomes while instituting practices to optimise their impact and engagement over time. This in turn elevates their relevance to the company leading to better workplace relations and, ultimately, better performance and productivity.

How have we got to this point?

As we mentioned in our 2021 white paper ‘The Future of Work’, leaders have presumed the only way to improve their people’s productivity is to apply ever more stringent practices to manage their activities. As a result, organisations the world over have felt compelled to introduce tighter controls to increase staff conformity all the while trying to curb the risk of counterproductive behaviours.

As absurd as it sounds, performance suppliers have exacerbated the issue by producing products that prioritise compliance rather than helping companies discover better ways of working that strengthen their people’s engagement. In other words, if organisations found a more constructive way to operate, the demand for such products would reduce thereby making their offerings irrelevant.

As a result, Human Resources as an industry has become an instrument of regulation and compliance rather than a mechanism to optimise the value a company realises from its human capital.

To prove the point, most executives today admit their people are becoming less engaged the more they apply HR-related products. Further to this, they can see they’ve caused such a calamitous breakdown in workplace relations that their ability to improve their people’s performance has largely been eroded.

Needless to say, we are not only seeing greater staff indifference as a consequence, we’re witnessing a rise in grievances because these practices have made employees the problem rather than the key to an organisation’s success.

This in turn has galvanised the sense amongst staff that employers are simply trying to extract as much as they can out of them rather than establish a partnership that optimises the benefits the relationship offers.

As dramatic as this sounds, the problems we’re witnessing are not a result of changing attitudes or a younger generation as many suggest, they are a result of poorly thought-through policies creating irreparable damage when they’re applied.

For this reason, executives need to recognise the harm these systems are causing because in all likelihood, the majority of their staff probably want to do a good job for and on behalf of the organisation as opposed to exploiting the relationship whenever they get the chance.

To address the problem, however, leaders need to deploy new-generation tools that optimise their people’s performance rather than trying to control their outputs as is the case with conventional systems.

They also need to engage their staff in structural reforms and the like so they see them as a means to improve the organisation’s productivity rather than a risk to their security – even though they may affect certain roles. Unfortunately, however, because of the way they’re being managed, most organisations undertaking them enter a state of paralysis meaning they lose much of the benefits they would otherwise realise if they were supported.

While it may not be a fair analogy, sports teams are forever refining their structures because they know it offers opportunities to realise improvements or increase their competitiveness, whereas in business, these exercises are typically viewed with disdain due to the impact they might have on people’s employment.

If a business is to increase its viability, it has to adapt to the market which requires leaders to secure the confidence of their staff. To do this, however, they need to enhance their participation and engagement rather than keeping them in the dark to try and protect their reputations.

While it is important we accept that a person’s ability to work is a basic human right, the right to work in a particular organisation is a privilege. That said, a workforce’s productivity should be considered a consequence of the company’s leadership rather than outputs they have no ability to influence.

For this reason, building a workforce where everyone is committed to the company and what it’s striving to deliver shouldn’t be difficult if the basics are put in place. However, if the relationship is underpinned by practices designed to address the wayward, it will destroy employees' interest in the business leading to a decline in their commitment.

Executives need to understand that despite the market, it’s possible to build a high performing organisation where staff not only take responsibility for their work but the outcomes they deliver.

However, to achieve this, they need to prioritise their success over everything else because after all, it’s the extent of what they produce that will determine the results the business achieves and, ultimately, what the organisation becomes. 

If you’d like to look at how Vantaset could help you achieve the above, call us on +64 9 522 9409 or email us at info@vantaset.com

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