The Real Reason We've Become Less Productive at Work

Greg Griesemer • Mar 07, 2023

“U.S. workers have gotten way less productive. No one is sure why.”


That was the headline of a recent Washington Post article highlighting a trend that has vexed business leaders in the post-pandemic era. While other economic indicators, like growth, remain on the upswing, the U.S. saw a 4.1% productivity drop last year — the largest decline since 1948.


When it comes to how much companies are producing per each hour of work, the trendlines are clearly moving in the wrong direction. The Post and other outlets have raised a number of potential causes — from burnout to “quiet quitting.” But from my perspective, there’s a clear elephant in the room.


It shouldn’t be any surprise that worker productivity has taken a nosedive right at the same time that more organizations have begun summoning workers back to the office. Elon Musk has made no secret of his disdain for working remotely, requiring Tesla employees to personally gain permission for working from home. Disney CEO Bob Iger just mandated that all employees return to the office for a minimum of four days a week, while Washington, D.C. Mayor Muriel Bowser has implored President Biden to call more federal workers back to the office in attempts to revive the downtown economy in the nation’s capital. Many CEOs, COOs, and CFOs I work with feel the same and have decided it’s long past time to put the pandemic behind us and get back to collaborating in person.

That may well be the right decision for many organizations. But they’re setting themselves up for a nasty surprise if they don’t rethink the way they measure productivity in this new environment.


At the beginning of the pandemic, many leaders were pleasantly surprised at how well their companies continued to plug along during the unprecedented, almost overnight transition to virtual work. Looking back, it shouldn’t be such a shock; not only were most of us well accustomed to working with people in distributed locations thanks to modern technology, we also suddenly had hours added to our day. The National Bureau of Economic Research found that professionals could save an average of 72 minutes a day by eliminating their commute, to say nothing of “super commuters” who regularly travel long distances into major urban hubs from the suburbs.


Factor in time spent on office conversation, spontaneous meetings, and other fixtures of daily office life, and it’s clear that for many employees, remote work added extra hours every week to focus on work with fewer distractions.

Employees may have effectively lost the argument about the merits of virtual work, but their bosses may come to regret that they haven’t thought through the productivity implications of bringing everyone back on-site. Many workers accepted the trade-offs of early morning Zoom calls or being summoned with an IM at any moment because they were working from home; spending hours on a train or car will change that situation profoundly.


The larger challenge is determining what implications return-to-office has on planning for the future. Many organizations have made the mistake of looking in the rearview mirror at what their teams were able to accomplish over the past year without factoring in the potentially significant impact of a return to a 9 to 5 on-site or a hybrid model.


So what can companies do to prepare for what I believe could be as much as a 10–15% drop in productivity? A few steps I recommend:


1. Align work schedules with goal setting. This involves setting achievable and ambitious goals, regardless of whether a hybrid or in-office work model is introduced. Work schedules and their impact on employee engagement and productivity are critical aspects that should be discussed in tandem. However, from what I have observed, this is not happening in many organizations. Instead, senior executive teams and boards tend to set goals in a vacuum, without considering the impact of work schedules on employees and their ability to achieve these goals. By taking the time to discuss and understand the impact of major shifts on employees, organizations can ensure that they are creating a productive work environment that benefits both the employees and the organization as a whole.


2. Monitor employee engagement. Stay connected and track employee sentiments as plans and transitions are made. Many employees simply want to be heard, consulted, and respected. If there is any lesson from the recent bungling of employee layoffs at many tech companies — in which downsizing was poorly communicated with no advance notice — it’s that organizations can’t afford to treat their people, their most precious asset, recklessly. You may not ultimately agree on policy, but give your employees a full hearing and a fair shake.


3. Offer flexibility in performance management. Too many small companies still haven’t invested in a robust performance management approach; broadly speaking, I recommend most organizations introduce a quarterly process that allows them to track milestones achieved, missed, and changed throughout the year on a rolling basis. Not a revolutionary concept, but one that is not being followed consistently. This is especially relevant for organizations like smaller clinical-stage biotech companies — the kind I regularly work with. For those companies, a development midway through the year, like the FDA putting a clinical trial on hold, can scramble the plan that has been established for the rest of the year.


The important thing is to take action. Employees are clamoring for more flexibility around work while more companies are ordering workers back to the office. If organizations push ahead with aggressive return-to-work policies, they have to make sure they’re thinking through all the downstream implications of that policy shift — and the likely hit to productivity is a big one.

Building The Right Foundation Series Part 3: How Startups Should Tackle Employee Well-Being

By Greg Griesemer • 01 May, 2024
I’ve written about how start-ups have to create a proper foundation in the early days—just like a new home needs a good basic structure to ensure that it doesn’t collapse when you add a second floor, and the electricity still functions when you redo the living room. For a company, this foundation helps it create the constants that employees, customers, and partners can rely on amid the usual ups and downs that all companies go through. In my mind there are three key pillars for this foundation, none of which can be neglected: compliance, employee well-being, and accountability. In this part of the series, I want to explain why employee well-being is so critical. (To read parts one and two of the series, go here .) Defining What It Means for Your Organization  I believe that to a large extent the future of the workplace hinges on employee well-being, especially as remote working environments continue to blur the porous line between work and the rest of our lives. Companies that neglect well-being run the risk of increasing burnout and turnover and reducing productivity and engagement—all of which can severely hinder the growth of a startup. On the flipside, I’ve seen firsthand how early-stage companies that get it right are talent magnets. They create an environment where employees feel valued and are aligned and working hard to achieve the business vision. As fast as many start-ups are moving to keep their momentum going, it’s vital for their leaders to carefully think through what employee well-being means for them. It's not just a matter of offering benefits; it's about defining a stance on the various dimensions of how you’ll approach your employees’ overall health, happiness, and satisfaction with work. This should include physical, mental, financial, and even spiritual considerations. What dimensions do you include in your definition of well-being? What do your employees value and expect? What programs and policies help ensure it? And what trade-offs are you willing to make in other areas of the business to make it a reality? From my conversations, I know CEOs and leadership teams can struggle on how to even begin answering these questions. In response I’ve offered a relatively simple framework, with a few questions for each, to get the conversations started. Rich dialogue usually spiders out from here. Getting Started Purpose ( Emotional ): Many start-ups I’ve worked with do not take the time to define their Vision and Values and miss out on the power that clarifying their “why and how” can bring to an organization. Employees seek out and stay with organizations that connect to their hearts and minds – sharing what’s in yours will allow that to happen. 1. Why does the company exist? 2. What is its passion? 3. What characteristics and behaviors will each employee exemplify? Health ( Physical, Mental ): Setting the direction of your benefits offering should be a top priority for companies that wish to remain attractive to current and potential future employees. Most employees do not worry about or even understand their coverage, but need peace of mind knowing that it’s there when they need it most. Getting the programs AND messaging right is key here. 1. What do we want our benefits to “say” about how we treat our employees? 2. Do we have the right broker partner to help us maximize our programs while optimizing our budget? 3. How will we educate our employees to keep them healthy and happy? Pay ( Financial ): Good, fair pay is a cornerstone of your well-being strategy and a non-negotiable. Competitive packages attract and keep talent, provide employees the means to care for themselves and their families, and are often viewed as a measure of equity. Spending time here will help create an environment where employees feel valued, respected, and motivated. 1. What benchmarking methods are you using to ensure competitiveness in your talent market? 2. How transparent do you plan to be on company matters? How openly will you share and communicate your decisions about pay equity, for example? Moving Forward Once you have answered these foundational questions, then you can design the policies and launch the programs to make those broad strokes a reality. At a time when talent is more mobile than ever, having clarity about the well-being of your startup's team is a strategic move that fosters a positive work environment and fuels long-term success. In my next post, I’ll take a look at the final critical piece of foundation-building: accountability.

How to Hire as a Non-Technical Founder

17 Apr, 2024
Our CEO, Greg Griesemer, recently had the pleasure of being featured on the Koridor Inc. podcast, Founders Korner. In this insightful episode, Greg shares his expertise on building a successful team for your startup, defining hiring goals, and mastering the hiring process to ensure your company's growth and success.

Building the Right Foundation Series Part 2: Why Compliance Can be Tricky for Startups — but Is Vital

By Greg Griesemer • 12 Mar, 2024
I’ve written about the need for startups to lay a solid foundation when building their business, similar to the way you build a new house. For a business, that foundation rests on three key principles: compliance, employee well-being, and accountability. In this post, I’ll look more closely at compliance and how to ensure a balance between protecting the rights and interests of your employees and maintaining the regulatory standards required within your field of work. Compliance might not be the most thrilling aspect of starting a business, but it's undeniably critical to get it right. It ensures that you safeguard your business from legal challenges and instills confidence in employees, customers, investors, and partners. Compliance should be a top-of-mind priority for the vast majority of new businesses, simply to ensure that they’re on solid legal ground within their jurisdictions. For example, an organization receiving a grant from the National Institutes of Health may need to take steps to ensure they’re compliant with requirements to maintain a drug-free workplace, which probably isn’t intuitive. 50 Different Ways to Do Things Various industries have their own rules, and each state has its own employment laws – some stricter than others in what they require from employers. It's essential to be aware of these laws and stick to them. Some states require you to pay within 10 days of the end of a pay period, while with others, it is 15 days—and some offer you option to pay monthly but require you to pay by a certain date and include days not worked yet. And don’t get me started on the rules and regs related to how you need to handle an employee who is leaving your company! Compliance is not just about legal adherence to national and state-level requirements that govern employment and hiring. It also includes important considerations related to operational policies, leaves of absence, and general standards of conduct—all of which help set the tone of the culture you’re trying to build within the organization. In short, a thoughtful approach to compliance ensures the stability and credibility of your startup and should be thought of as a critical base layer that will enable well-being and accountability. Let's look at a checklist of some of the questions that can help you assess your approach to this important topic. Checklist: Questions to Ask Yourself about Compliance: 1. What is our organizational tolerance to risk? Answering this question will help guide your development of policies and standards, as well as how you’ll enforce them within the organization. For example, what is the balance between trust and structure you’d like to strike, and what risks might you take on as a result? Are they managable? 2. Do I know and understand industry-specific, national / state, and customer requirements that are applicable to my business? Some startups will find this easier to answer than others, though we always recommend that our clients bring in legal and/or HR experts to help with. You want to be sure on this one! 3. Have we created policies and standards, and communicated them to the business? In our work with startups and early-stage companies, we generally find this work has been done by a non-HR employee, typically someone with a Finance or Operations background. While the work is solid, there are often critical holes that develop and cause pain or unnecessary exposure as the organization grows. 4. Do we have a process for regularly updating compliance protocols as regulations evolve? You’ve nailed #1-3, time to sit back and relax – right? WRONG! States and the federal government often change regulations regularly throughout the year, so developing a process to keep up with the pace of change annually is just as important as setting your compliance infrastructure up in the first place. Compliance might seem like just another bureaucratic hurdle, but it's the shield that protects your startup. Proactively addressing compliance will pay dividends as you grow and scale and ensure you can hold yourself accountable along the way.
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