In recent years, we have come to see a lot of news about “productivity”. Even in your company, you may have heard from management or superiors that you should work more productively.
The word “productivity” used in such cases refers to the productivity of labor, so it is correctly called ” labor productivity .”
You may have a vague image of “increasing labor productivity” such as “improving work efficiency” and “getting results without overtime”. However, there may be few people who can clearly explain the meaning of “labor productivity” and how to calculate it.
As long as you do not have a correct grasp of the labor productivity of your company and yourself, even if you set goals such as “improvement of work efficiency” and “improvement of productivity”, it is meaningless because the current situation and ideals are not visualized. plug.
This time, after explaining what labor productivity is, I will also explain in detail how to calculate it.
Productivity is how to produce more results with less effort.
Before explaining labor productivity, let’s first confirm the meaning of ” productivity .”
What is productivity
Productivity is the degree of productivity . In recent years, we often hear the phrase, “Let’s raise productivity.” This means, ” Let’s produce more results with less effort .”
Productivity can be calculated by the following formula.
In recent years, the word “productivity” generally refers to “ labor productivity ,” which will be discussed later.
What is labor productivity
Labor productivity is the degree of productivity in labor . It refers to ” the output produced by one worker per hour ” or ” the output produced by one worker “.
Labor productivity can be divided into two types depending on what is placed in this “outcome”.
[1] Physical labor productivity
The output calculated by physical labor productivity is the amount of production . It can be calculated by the following formula.
For example, 2 employees produce 12 products in 2 hours. When calculating physical labor productivity, the following calculation is performed.
[2] Value-added labor productivity
Value-added The result calculated by labor productivity is added value . Added value is the amount of production (sales) excluding external costs such as raw material costs, processing costs, and transportation costs . In general, companies apply various processing and ingenuity to the raw materials they purchase. Added value is the amount of value that is newly added through processing and ingenuity.
Value-added labor productivity can be calculated using the following formula.
For example, let’s say two employees made a sale of 20,000 yen in two hours. At this time, the cost of purchasing from the outside is 8,000 yen, so the added value is 12,000 yen.
Labor productivity in Japan
Japan’s labor productivity is calculated by GDP
“Japan’s labor productivity” is sometimes taken up in the news.
When calculating labor productivity as a country, use the value-added labor productivity calculation method and apply ” GDP ” to value added. GDP stands for “Gross Domestic Product” and means gross domestic product . It represents the total value of goods and services produced domestically in a year .
Japan ranking
The Japan Productivity Center conducts an international comparison of GDP and labor productivity every year. In Japan, where a large increase in the number of workers cannot be expected due to the low aging population, it is necessary to produce more efficient results in order to enrich the GDP per capita. Labor productivity is being focused on as one of the quantitative indicators.
Japan’s labor productivity in 2015 was $74,315 (7.83 million yen). It ranks 22nd among the 35 countries in the OECD.
Compared to the United States, it is about 60% , and this percentage has hardly changed since 1980. Professor Hugh Patrick of Columbia University Business School points out that this disparity is due to the difference in pricing strategies between Japan and the United States.
Since the 1990s, Japanese companies have a history of strengthening their competitiveness by realizing lower prices even at the cost of cutting profits in response to deflation. On the other hand, the United States has expanded added value by improving productivity, and I think that the difference is also appearing in labor productivity.
If Japan aims to further improve labor productivity in the future, it can be said that a strategy to expand added value by creating new services in parallel with improving work efficiency will become important.
By Industry
The figure above is a graph of labor productivity of Japanese companies by industry and manufacturing industry.
By industry, labor productivity is rising in industries that are highly dependent on equipment and capital rather than labor, such as “real estate,” “electricity, gas, and water,” “finance and insurance,” and “information and communications. ” is higher . On the other hand, labor productivity is low in industries that are highly dependent on labor, such as ” services in general” and “agriculture, forestry and fisheries .”
summary
A deeper understanding of labor productivity is important for producing high results with less effort. By calculating your company’s labor productivity and your own labor productivity, you can numerically measure the standards that were vague until now.
By quantitatively grasping the current situation and setting goals based on comparisons with competitors and rival employees, the daily action plan will also become clearer. How about calculating it once?
