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How to measure and improve blue-collar productivity

Updated: Feb 21, 2022

You have probably heard or read a lot about being productive yourself as a business owner and manager, and how to encourage productivity in office-based teams – the ‘white collar workers’.

But what about the real, hands-on drivers of your progress – the construction workers, machine operators, truck drivers and agricultural labourers – traditional wearers of the blue collar? How do you go about motivating them, and measuring the results? There’s less information on this subject, so this is a bid to fill that gap.

How to calculate blue-collar productivity

Improved output generally produces greater revenue, so your starting point should be working out what your blue collar workforce is actually achieving right now.

There are two ways to measure productivity:

  • Productivity per hour worked

  • Productivity per employee

Productivity per hour worked

The formula is: Total Output (in dollars) divided by Total Hours Worked = Productivity Per Hour.

For example, let’s say your business produced $50,450 worth of saleable goods or services last month, and the labour input to produce them totalled 810 hours. The Productivity Per Hour result is $62.28 ($50,450/810).

If your business is seasonal (e.g. agriculture) you made need base your calculations on annual output.

Productivity per employee

In this case the formula is: Total Output (in dollars) divided by Total Number of Employees = Productivity Per Employee.

Using the same output ($50,450), and assuming there were six employees, the Productivity Per Employee works out at $8,408.

This may not be a very useful indicator if you have a mix of full-time and part-time employees.

How to improve blue-collar productivity

Now that you have a measure of how much your blue collar employees are producing, you can take steps to improve the results by concentrating on three areas:

  • Blue-collar-friendly HR policies

Employees who feel they are appreciated are likely to put in a greater effort and be more loyal and productive.

It’s not just about paying them what they’re worth, but more about treating them with the same respect and fairness that you show towards your white-collar workers. Transparency about past results, future plans and looming deadlines is a good start. Pay them a visit at their worksite to understand the demands of their job, and ask them for suggestions, making sure to follow up on them. But also get to know them as people and find out what challenges they may have outside working hours.

  • Regular training

Efficient employees who know exactly how to perform their tasks are clearly going to be more confident and productive. Train your blue-collar employees regularly to keep them up-to-date and introduce new skills. As a result, they will also experience greater job satisfaction and be more likely to stick around, reducing your workforce replacement costs.

  • Better communication

Keeping employees adequately informed can reduce downtime and speed up production. Don’t leave them in the dark. Aim for clear instructions delivered without unnecessary delay, and with the required amount of explanation. Communicate about expected heavy demand or slow periods, and give advance warning about any production deadlines or overtime requirements.

  • Measure again and be surprised

If you genuinely take steps to implement these changes, and then recalculate productivity after a suitable time has elapsed, be prepared to record an upswing, and a resulting improvement in your bottom line.

Original post by Bank of Queensland



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