Telling the truth about SME life today

Positive company culture is the answer to the productivity puzzle. Here’s why

A recent report even revealed UK workers are 27% less productive than their German counterparts. German workers could go home early on a Thursday afternoon and get as much done as a UK employee who worked all the way up until Friday afternoon.

And with the Government making innovation and productivity key areas of focus for the years ahead including the launch of the Industrial Strategy and the recent review into growing the Artificial Intelligence capabilities in the UK this is one puzzle that needs to be solved.

Nearly every SME leader is strapped for time, with many (22%) actually admitting they don’t measure their productivity at all. Does this mean that productivity isn’t a priority for these leaders” And if so, what can be done to ensure small businesses are getting the most out of their employees?

From extensive research into workplace culture we’ve found it’s having a knock-on effect on productivity levels. A positive workplace culture will be hugely rewarding for a business, with 60% of SME leaders anticipating that it will drive better levels of customer service and satisfaction. Furthermore, 49% expected to see more ideas and innovation coming from their employees and 55% anticipated improved employee performance and crucially productivity.

There are a few changes that small businesses could make internally to reap the productivity rewards of a more engaged, focused and driven workforce.

Measuring productivity

It’s widely appreciated that measuring something is a sure-fire way to raise its importance. We found in the Culture Economy report that the most common way SME decision makers are measuring their productivity is analysing money in versus money out. But is this really the best way for your business?

When it comes to productivity, the measurement options are many and varied, from production volumes, headcount and revenue to 360 degree feedback and even specialist apps and technology. One size doesn’t fit all, but understanding how your competitors measure their productivity can help to define how best you should measure yours. There may be lessons to be learnt or a way of benchmarking your performance against your peers effectively.


Auditing your use of technology can be extremely helpful too, especially to analyse time doing administrative tasks as that will often be better spent elsewhere. Tasks such as approving holiday may only seem minor and only take a couple of minutes each time, but if you were to add up how much time this takes over a year, it may not seem so minor. There are many areas within a business that can be automated, freeing up huge amounts of time that would be better spent on developing the company culture or focusing on business development.

Understand employee engagement

A company also needs to monitor culture, happiness and employee engagement, as it’s vital to understand what makes your staff tick and fuel productivity. The more you can understand this, the more you can realise what does not work to keep your employees engaged.

For small businesses, this is often done in terms of employee satisfaction surveys, which include questions about work life balance, if you feel valued in the workplace, managerial styles and many more. Often, start-ups have face to face meetings instead to gain an understanding of their employees honest thoughts. With these, honesty and openness is an integral part of understanding engagement and therefore enhance productivity.


Naturally, humans love to be rewarded. In the workplace it helps us to feel valued and appreciated. It is a way to provide recognition for hard work and incentives can be directed for certain areas of the businesses such as business efficiency and greater productivity.

However it’s important to ensure the rewards are actually incentivising employees and, as most companies have a diverse range of employees, incentives may have to differ from person to person. For someone, free breakfast may be a huge benefit but for others, the flexibility to be able to work from home may be more appealing.

With productivity being one of the key questions of our economic times, it is a challenge that needs to be recognised and addressed. And it is worrying that so many businesses appear not to be aware of their relative performance.

Improving productivity has a huge range of benefits from business performance and survival to individual incomes and wellbeing. It is positively correlated with employee engagement and business culture. And as the UK redefines its business identity on the international stage post-Brexit, this surely must be at the top of everyone’s agenda.

Jonathan Richards is CEOAnd founder of specialist HR software company?Breathe.

In association with Breathe, Real Business is running the SME Culture Leaders List 2019, the only league table of its kind catering to the UK’s thriving small and medium businesses that put company culture first.


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