US Worker Productivity Drops to Lowest Level in 75 Years: What’s Going On?

 

Do you agree with this statement: “The productivity is going down”?

The world is changing, and it’s not good for the workforce!

Worker productivity in the US has dropped by 2.7% in the first quarter of 2023, compared to the same period last year, according to a report from EY-Parthenon. This is the first time this has happened in 75 years. Gregory Daco, the chief economist at EY-Parthenon, noted that this decline in productivity is unprecedented. For small-business owners, the issue is not easy to see. Why? “You’re going to really struggle to find the right talent at the right price,” says Daco.

But why is productivity dropping?

Daco explained that strong productivity occurs when output surpasses labor growth, while weak productivity results from sluggish output growth despite strong labor growth.

Some suggest that remote and hybrid work arrangements might be contributing to this trend.

“From our clients across sectors, we hear similar stories of reduced productivity because of the new work environment,” he said. American worker productivity is dropping, but leaders shouldn’t just point a finger at remote work.

The work environment changed rapidly, leaving us little time to adapt to this new reality. The question now is: What should we do to enhance productivity?

1- Do what’s right for your team.

Daco says: “It’s really all about what employees are delivering in your current flexible setup, and making tweaks that ensure that you’re increasing productivity and maintaining durability and longevity for your employees.

2 — Embrace new tools and technologies.

Utilize clear indicators and DATA that will enable you to comprehend your team’s performance and identify necessary adjustments for enhancing productivity.

3 — Utilize employee recognition to encourage productivity.

I appreciate Simon Sinek’s statement: “If you don’t understand people, you won’t understand business.” People are a company’s most valuable asset. If you lose them, you also risk losing your customers. It’s crucial to recognize that people have evolving needs, and adapting to these changes is essential for increasing productivity.

4 — Focus on the longevity of your team.

Daco suggests that retaining employees is a key focus for many HR professionals this year, potentially boosting productivity.

If it’s hard to find talented people, what happens when other companies offer better benefits?

Comments

Post a Comment

Popular posts from this blog

Employee Turnover Rates by State in the U.S. and How to Avoid Them

Image
High employee turnover drains resources and damages morale. This article provides actionable strategies to understand your turnover rate, identify its root causes, and implement effective retention strategies. Whether you have five minutes or an hour, you'll find valuable insights to build a more stable and engaged workforce. The High Cost of Employee Churn: Why Turnover Matters Employee turnover, the rate at which employees leave an organization, is more than just a statistic; it's a vital sign of workplace health. High turnover can cripple a company's bottom line and create a toxic work environment. While some turnover is inevitable (and even desirable in certain cases – more on that later), excessive turnover can signal serious underlying issues. The financial impact alone is staggering. Replacing an employee can cost anywhere from six to nine months of their salary, according to SHRM . These costs include recruitment fees, lost productivity during the vacancy, onboa...
Read more

5 most interesting employee motivation statistics

Image
  Here are 5 employee motivation statistics from 2025: Employee engagement in the U.S. fell from 36% in 2020 to 31% by 2024, reflecting a consistent decrease in motivation and workplace connection. McKinsey Gen Z (42%) and Millennials (40%) are most motivated by work that aligns with their values and sense of purpose, while Gen X (34%) and Baby Boomers (32%) tend to focus more on financial security and long-term career stability. This highlights how motivation differs across generations. Deloitte Employees in hybrid work environments report the highest motivation levels (47%), compared to 39% for those working remotely and 34% for those in on-site roles. Own Labs 69% of employees say they would put in more effort if their contributions were acknowledged, showing that even basic recognition can significantly boost motivation. Gallup 90% of employees say that being recognized for their work encourages them to work harder and stay motivated. Achiever   It’s important to remember...
Read more

The Heaven or Hell Choice

Image
Today, I want to share a simple truth about handling customer complaints. It’s all about how we respond to their issues. Let’s call it the “Hell or Haven” choice. Let me tell you a story to explain this.   Picture yourself at a cozy café, your favorite spot for a quiet afternoon. You order a cappuccino, but when it arrives, it’s cold. You politely point this out to the server, expecting a quick fix. Instead, the server ignores and says, “Yeah, our coffee machine’s been acting up. Sorry, but that’s how it is today.” Now, what started as a minor issue — a cold cappuccino — suddenly feels huge. You’re frustrated and disappointed, thinking about leaving a bad review or even finding a new café. Jean-Louis Gassée, formerly of Apple France,  described customer service  interactions as a choice between two tokens: “It’s no big deal” ( Heaven ) and “It’s the end of the world” ( Hell ). When you respond with one, the customer often feels compelled to choose the other. In our café s...
Read more