Much of the news agenda, post-Brexit and post-lockdown is on the importance of ‘productivity’ to the UK’s economy.

Productivity is not a novel concept so why is it suddenly all over the news and what does it actually mean?

In purely economic terms, productivity is a measure of output per unit of input. In the context of a company or organisation it is the measure of the efficiency of its production processes or of how much ‘work’ is done by its staff overtime.

Productivity is seen as a key enabler of growth or corporate competitiveness. In contrast, low productivity acts as a brake on wage increases and corporate profit.

To answer the question of why it has recently gained currency, we need look no further than the Prime Minister’s recent speech at the Conservative Party Conference, in which productivity was a key theme.

This is sound economic thinking: productivity is improved by automation and automation means the introduction of new technology.

There are a variety of ways that technology can be applied in the workplace to improve efficiency and ultimately enhance productivity. These include communication, workflows, collaboration and employee engagement.

At Level we are already seeing businesses beginning to embrace this change, especially in sectors most impacted by cost of spiraling salaries such as haulage and logistic companies whose workforce is mainly HGV drivers subject to the most intense shortages of supply.

These companies are under real pressure from wage inflation and, as a result, need to drive down costs throughout their business.

To do this requires investment in the productivity enhancements that result from automation.

In practical terms, this means introducing technology that make processes more efficient. To free up people’s time from low value, repetitive activities and allow them to concentrate on task that add more value to the bottom line and can’t be delegated so easily to machines.

One of these activities is running payroll. In any company this is a mission-critical, intensive process that usually monopolises the attention of the finance team for the several days that lead up to (and come after) the actual event of pay day.

For companies that run weekly or even fortnightly payroll this state of affairs is all consuming. The result is that a predictable, functional process becomes the overwhelming preoccupation of several employees in perpetuity.

From the perspective of any CFO looking to make productivity gains, reducing the frequency of payroll (ideally from weekly to monthly) is the most obvious efficiency-enhancing, low-hanging fruit there is.

At the same time, however, it’s important to close the gap between work and pay. Studies have indicated that this improves the morale of workers and incentivises them to fill shifts more readily.

The challenge for employers, therefore, is to improve the flexibility and availability of salary to workers whilst reducing the overhead of running payroll. This is where new ‘fintech’ solutions such as On-Demand Pay or Earned Wage Access can provide the best of both worlds.

By partnering with providers of On-Demand Pay solutions, employer can enjoy the efficiency of monthly payroll whilst offering their workers access to their earnings throughout the month.

A win-win for employers and employees and an illustration of the productivity gains that the considered application of technology can deliver.