Collaborative workplaces and industries key to productivity

The challenge for improving productivity is implementing cultural change so we don't get workplaces that only focus on cost cutting, Association of Professional Engineers, Scientists and Managers, Australia (APESMA), Chief Executive Officer, Chris Walton has told a CEDA audience in Sydney.

"Australian workers actually want to be productive workers, they want their organisations to do well...they also want their industries to thrive and grow," he said.

"It's great that we do the academic studies, but surely we all know from our own experience that if we're working in an organisation that we care about,  where we're respected, have a say in how the place runs, rewarded for our contribution, that's usually a more productive, effective workplace."

Mr Walton also said skills and technology are critical, and often overlooked, in the productivity debate.

"We're not going to improve our long term productivity unless we improve our STEM; science, technology, engineering and management skills," he said.

"How can we roll out our infrastructure...improve our innovation in manufacturing and elsewhere without having those key skills...and an investment in those?

"We need to make sure that the reason we're failing to meet the productivity targets is not because of a failure to invest in technology and skills or in changing our culture in our workplaces."

Macquarie University, Faculty of Business and Economics, Professor of Management, Associate Dean (Research), Professor Paul Gollan said a positive workplace culture, which gives all employees a voice and allows good ideas to be heard and implemented, is necessary for higher productivity.

Professor Gollan said the preliminary results of research at Macquarie University of range of industries suggest more direct forms of employee voice and engagement are effective in ensuring high levels of productivity.

Business Council of Australia, President, Tony Shepherd said: "Australia's prosperity is predicated on a shared understanding between businesses, government and workers that we can only raise our living standards by growing the economy."

"We can only grow the economy if companies can stay competitive in an increasingly competitive world," he said.

"This is only going to happen if different parties work together to create and maintain productive, collaborative, safe and innovative workplaces."

Mr Shepherd said essential to this, was a consensus on the role productivity plays and a community understanding that competition is not something to be feared.

"Competition means our businesses are stronger, resilient and more sustainable," he said.

"As a nation there is nothing wrong with aspiring to be a high wage, high productivity country.

"But today we really risk becoming a high cost, low productivity country.

"Wage rises without productivity increases means businesses lose their competitive advantage and eventually can be priced out of business and jobs.

Mr Shepherd also said the BCA "agrees with the Federal Government, productivity has to be driven at the firm level, and government's role is to facilitate and incentivise and not put rocks in the path of firms seeking to improve their productivity".

"Firms will only invest and innovate if they can capture the commercial benefits of their actions, and in the current environment they perhaps lack the capacity and confidence to do so," he said.

Australian National University, Research School of Economics, Professor Kieron Meagher spoke of the characteristics of high performing workplaces.

Professor Meagher referred to his involvement with a Society for Knowledge Economics project examining the leadership, culture and management practices for high performing workplaces.

The project, which evaluated 78 firms on 18 measures found that:

• High Performing Workplaces (HPW) were up to 12 per cent more productive than Low Performing Workplaces;
• Correlation analysis found leadership has the strongest correlation with profitability and  productivity; and
• HPW are up to three times more profitable than their peers.

"Twelve per cent might not sound like a very large number...(but) that's more than a decade's worth of productivity growth," Professor Meagher said.

When looking at work practices, Professor Meagher said the project has found "using information well...seemed to be very important as did involvement in decision making of people from lower levels".

"Investment in training is only useful, it seems, when it's really targeted to the job people do," he said.

"We found that a lot of generic training wasn't correlated with high performance."

This event was the second in the four-part productivity series in NSW. In the third session, to be held on 6 September, CEDA will discuss productivity in the public sector.