Growth is a top priority for CEOs today, and as traditional avenues for driving growth, like market consolidation, outsourcing and cheap financing dry up, CEOs are looking to employee productivity to fuel success in 2025 and beyond.
Discussions about productivity are seemingly everywhere and often with conflicting notions about whether employee productivity is actually increasing or decreasing. While there may not be agreement on the direction of productivity, most can agree that productivity is difficult for employers to define, measure and influence.
Gartner determined, through extensive surveys and interviews, that the two critical elements of employee productivity are efficiency and value creation. Efficiency is whether employees are doing quality work consistently and on time, and value creation refers to employees devoting time and skills to work that is results-oriented and focused on organizational priorities. When employees are productive in this way, their organizations are 3.1 times more likely to see an increase in revenue and 3.6 times more likely to see an increase in profitability.
In order to realize these benefits, here is what CEOs need to understand about employee productivity:
HR involvement in Strategy Boosts Employee Productivity
Employees, managers and business leaders view productivity in different and sometimes contradictory ways. It’s HR’s job to bring everyone together.
Unfortunately, many HR leaders don’t see productivity as their job, and 1 in 2 HR leaders say HR is not always included in making decisions that impact employee productivity. However, a 2024 Gartner survey of nearly 2,000 managers of knowledge workers found that with direct HR involvement, employees are up to 11% more productive.
In order to drive productivity, HR needs to be an active partner in shaping productivity initiatives by:
- Including productivity in HR strategy to secure their seat at the table
- Identifying collaboration opportunities for cross-functional productivity initiatives
- Articulating the talent tradeoffs of productivity initiatives to the C-Suite
- Championing employee needs in productivity strategy
AI Usage Does Not Guarantee Productivity
While there is widespread adoption of AI – 84% of HR leaders say their organization is using or piloting GenAI tools – productivity gains remain elusive. A December 2024 survey of more than 3,400 knowledge workers found that just 8% of employees are fully capturing productivity gains by using GenAI.
To realize the intended benefits of GenAI, HR must ensure employees not only have awareness of the tools available to them, but access to learning and development opportunities to effectively adopt and use the tools consistently.
Taking an employee-centric lens, HR can help leaders prioritize AI deployments and execute implementations successfully based on what employees need to be more productive and innovative. When organizations take a human-first approach to AI, employees are 1.5 times more likely to be high performers and 2.3 times more likely to be highly engaged.
Hybrid and Onsite Employees Are Equally Productive
The general perception among leadership is that productivity is stronger when employees are in the office. However, Gartner data shows that organizations who introduced RTO mandates in the past 12 months saw no immediate effect on the productivity of the average employee or team. Further, a Gartner December 2024 survey found that the same percentage of onsite and hybrid employees (21%) were ranked as highly productive.
The reality is, there are many attributes that drive productivity beyond a physical location. Gartner analysis of these attributes showed that a supportive team culture is a key differentiator, driving productivity of both hybrid and onsite employees.
To foster a supportive team culture, HR leaders should empower managers to discuss productivity openly and positively, and encourage teams to set their own productivity values, ensuring feedback aligns with these ideals.
Data Context, Not Data Volume, Drives Productivity
When it comes to measuring productivity, numbers only tell part of the story. Equally as important is understanding the context in which the data was collected.
Gartner research found that investing in getting detailed contextual information for a focused set of metrics has almost twice the impact on employee productivity as acquiring more quantitative data on a range of metrics. Focusing too much on the data, and ignoring non-measurable labor, also runs the risk of employees gaming the system.
To gather the context needed to effectively use productivity data, HR should have those who know the work best to shape the productivity metrics and utilize local colleagues to help interpret the metrics.
When organizations acknowledge and embrace these four productivity facts, they can increase employee productivity by 35%, which is the equivalent of an employee working 2.8 hours more each day and contributing more than $47,000 annually in extra revenue.
With CEOs hyper focused on growth and relying on employee productivity to fuel it, HR leaders need to ensure they are doing their part to support employees and power the success of the business.