02/20/2024

Steps Small Businesses Can Take to Prolong Labor Productivity Gains

The nation's increased labor productivity rate has risen above post-war averages

Most owners and operators of U.S. small businesses already benefit from the ongoing burst in labor productivity. But given the challenge of boosting performance from existing staff levels and current equipment and tech, companies should do whatever they can to sustain current momentum--or even try to build on it.

U.S. companies, employees and the broad national economy are again elevating some of the efficiency lost in recent decades, The New York Times reported Wednesday. Labor productivity increased 2.7 percent last year, fueled by a 3.2 percent rise in the fourth quarter of 2023, according to the U.S. Bureau of Labor Statistics. A similar 3 percent-plus rate of improved production from the same resources during the second half of last year was more than double the average increase between 2005 and 2019, the paper noted.

The advantage for business owners and managers is evident: higher production of goods or services means increased output, and the ability to satisfy more customers at the same cost. A resulting rise in income could then finance expansion and fund pay raises for better performing employees. What's not to love by everyone involved--especially given the wider benefits to be had?

Please select this link to read the complete article from Inc.