Redefining productivity metrics: Shifting from headcount to hearts and minds

Productivity in the UK has seen a significant decline with per-worker growth is at its lowest level since the 1800s. It’s clear that, besides organisations not benefiting from a wholly productive workforce, this alarming trend signals something else: that traditional methods of measuring productivity are completely out of step with today’s needs.

In this UK business environment, where only 4% of firms are classified as ‘high growth’, a new approach is needed to understand and drive productivity - especially within HR where older metrics fall far short in capturing the true value of people at work.

The nature of work and skills are changing at a breathtaking pace. Yet, HR’s metrics and approaches often remain static, clinging to methods better suited to the industrial era. It’s no longer enough to simply count heads, divide revenue by the number of employees, or focus on the number of units produced or services rendered. Productivity today needs to reflect an organisation’s broader purpose and the wellbeing of its people.

Measuring real productivity today involves creating a workplace where employees feel engaged, valued, and united by a common mission. This requires a shift. HR functions need to move away from purely cost and efficiency-based metrics to ones that gauge the wellbeing, growth, and contributions of their workforce. When people feel they’re part of something greater, they’re not only more productive but also more innovative, resilient, and aligned with the company’s direction.

Achieving this shift, however, requires refocusing HR’s role. How it defines, measures and facilitates productivity must change.

Focus on employees to build better productivity

Just what does an HR function need to focus on now? 

Employee engagement tells a powerful story about productivity potential. Employees who are content and find fulfilment in their work are more likely to perform at a high level and less likely to leave. Tracking engagement allows HR to identify areas where policies or work environments need adjustments, ensuring the organisation fosters a supportive and empowering atmosphere. Measuring engagement goes beyond simple retention metrics, it offers insight into whether the workplace itself encourages productivity, innovation, and a shared sense of purpose.

The fast pace of change across industries makes continuous learning and development essential for both individual and organisational growth. So tracking participation in training and development programmes offers a lens into HR’s commitment to supporting the growth of their people. When employees are encouraged to expand their skills, they’re better equipped to meet emerging challenges, enhancing organisational productivity and resilience. Investing in people’s development is a clear signal that an organisation values their growth, creating a ripple effect of engagement and dedication.

Diversity and inclusion, too, have a foundational role in redefining productivity. A diverse, inclusive workforce brings together a wealth of perspectives, ideas, and backgrounds that can drive better performance and creativity. Organisations can benefit from the collective strengths of their people while also providing insights into areas where greater inclusivity may be needed. By harnessing the full potential of every employee, organisations create a more innovative and productive environment.

Similarly, measuring Employee Net Promoter Score (eNPS) provides a straightforward yet profound insight into the workplace environment. A high eNPS indicates a place where employees feel valued, engaged, and loyal enough to recommend their organisation to others.

It’s essential that HR teams also track innovation and idea generation. The number and quality of new ideas within the organisation can reveal whether employees feel empowered to contribute meaningfully and think outside the box. When employees are encouraged to share their insights, it highlights an environment where they’re not only seen but heard, valued, and respected. This, in turn, drives engagement and productivity, as people are more likely to invest themselves fully in a workplace where their contributions matter.

From a tick-box exercise to value creation

Achieving a transformation in productivity measurement requires shifts from compliance and risk management to value creation. From headcount to hearts and minds. 

This is perhaps a leap of faith for the traditionalists, but HR can operate very efficiently as a strategic partner, where they focus on ways to actively enhance employee experience, engagement, and overall performance. In this way, their initiatives align with broader organisational objectives, while driving a culture that prioritises people. Leveraging data to make informed, employee-centric decisions allows HR to anticipate needs, recognise patterns, and deliver solutions that strengthen the company from within.

HR’s approach to productivity can also reflect a commitment to its own continuous improvement. Regularly assessing and refining processes ensures that HR remains adaptable, responsive, and in tune with the evolving needs of the workforce. This flexible, proactive stance positions HR as a critical player in the broader organisational strategy, transforming it from a traditional administrative function to a core driver of company success.

Ultimately, redefining productivity isn’t about abandoning metrics; it’s about embracing those that truly reflect the purpose-led nature of organisations.

The by-product of moving beyond basic calculations to focus on employee engagement, wellbeing, morale and innovation? It can bring remarkable improvements in productivity.