A Closer Look: Are You Facing a Labor Shortage – Or A Shortage of Labor?

March 4, 2019 Karli Langner

In such tight labor market, it’s tough finding and retaining the workers with the skills and dedication you need to get the job done. The shortage of labor is increasingly problematic in the heavy materials industries, where experience and craftsmanship are key to meeting schedules, budgets and quality standards. On the other hand, how can you ensure that you are getting the best from each of the workers you do employ?

We aren’t implying that workers might be shirking their duties or taking shortcuts – professionals don’t do that. But in industries where many of the workday tools and techniques haven’t changed in decades, are you sure you are empowering workers to reach the levels of productivity that their talents should allow them to achieve?

First, it’s important to understand that labor productivity is not a measure of the capabilities or output of individual workers or even of your workforce as a whole. According to the online financial education resource Investopedia, “Labor productivity, also known as workforce productivity, is defined as real economic output per labor hour. Growth in labor productivity is measured by the change in economic output per labor hour over a defined period.”

In other words, labor productivity measures how effectively your operation makes use of available labor, equipment and capital to create the desired output. So that means it’s you who are responsible for gains or losses in labor productivity.

When you make appropriate investments in better equipment or install systems to streamline important tasks, you are likely to see greater output with the same amount of labor hours, which means labor productivity increases. When tools and equipment are not working or unavailable, or if your processes demand wasted time or travel, output per effort is likely to fall, resulting in decreased labor productivity.

So, can unfilled positions or bad hiring decisions hurt labor productivity? Of course they can. At the same time, management’s business practices and investment decisions have a far greater effect on labor productivity. It’s not the quantity of work that matters, it’s the quality of work that’s important.

That means the solution to your talent shortage may not be additional workers. It’s more likely that you need to equip your existing workforce to work smarter, faster and more efficiently.

Hero Hint: By providing a well-organized, well-equipped worksite and putting in place streamlined processes and procedures, you have the potential to save time, money, materials, and effort. That means a better job for everyone.

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