Productivity: How Much is Too Much?

Are more productive companies less likely to hire? Is their efficiency a hindrance to job creation?
 
According to the Manufacturing & Distribution Monitor Summer 2011 Report, released by McGladrey, the answer to both those questions is "no." More than half of the respondents to the survey – 58 percent – said they were planning on adding employees to their workforce in the next 12 months.
 

For companies who reported increased productivity over the last 12 months, that percentage was even higher, with 64 percent saying they were planning on hiring.
 
"Backlogs are starting to go up, and companies are reaching the point where they need to start adding bodies," says Karen Kurek, head of McGladrey's National Manufacturing & Distribution practice and author of the report.
 
That said, some companies remain hesitant to hire in the face of resurging economic uncertainty, she says. "For some respondents, hiring is generally seen as a last resort, when production levels can no longer be maintained through overtime and increased workloads on existing employees," Kurek writes.
 
Being aware of the workload limits of your employees is important to maintaining loyalty and worker satisfaction – and according to a MetLife survey earlier this year, employees may be reaching that point. MDM Editor Lindsay Konzak, reporting on that survey, wrote: "While employers may be happy that they were able to do more with less, employees may feel strained. As the economy improves, those employees may be looking for new employment opportunities."
 
Read more about the McGladrey report in the Sept. 10 issue of Modern Distribution Management