Inefficiency is defined as a lack of organization or skill that wastes time, energy, or money. For business owners, it is the practice that sparks a worst-case scenario. Every penny spent on tools and software to make the business run smoother is the cost of running an efficient organization. But even the biggest businesses can be faced with inefficiency if their methods impede their operations.
Four ways inefficiency impacts your business
There is no denying that inefficiency negatively impacts businesses. First, let’s break down how this happens, so you can recognize it more easily within your own organization.
It costs you money
Inefficiencies can cost businesses up to 30% of their annual revenue, according to market research from IDC. When you spend more money than needed to get the same result, it’s perhaps time to assess how you can improve efficiencies.
It wastes your time
Are lengthy processes costing your business valuable time? When it comes to running an efficient organization, every minute spent unproductively is a waste of resources. If you find your employees are spending more time waiting and less time working, you could be at risk of inefficient practices impacting your business.
It reduces quality
Every missed opportunity to improve your product or service quality is another example of inefficiency in the workplace. Essentially, the less you improve your output, the more you depend on old processes—making it much more likely for defective goods or low-quality services to reach your customers.
It damages morale
As well as impacting your business directly, inefficiency also affects the morale of your employees and increases the likelihood of a toxic workplace culture. When an organization isn’t performing well, it has less capacity to reward its employees. As a result, employees become less enthusiastic about their work. According to Gallup’s State of the Local Workplace, 85% of employees are not engaged or are actively disengaged at work, resulting in $7 trillion in lost productivity.
How to address workplace inefficiency
So, now we know exactly how inefficiency can have a negative impact on a business. But how do we fix it? The first step is always recognizing the problem, and once that is out of the way, you need to make some actionable objectives to improve efficiency. Here are just a few ways you can do this.
Being open and transparent with your employees can do wonders for efficiency in the workplace. Staff members that feel like they are part of a community of trust are more likely to be engaged with their work, instead of lacking interest. Equally, encouraging collaboration between peers is a great way to boost knowledge sharing across the organization. The more colleagues work with each other, the more they will learn from each other.
Off-site team-building activities are a great way to kickstart a collaborative workplace culture. Bonus points for combining it with something fun that encourages a healthy lifestyle.
If you think that micromanaging your employees will lead to increased efficiency, think again. Employees who have their managers constantly looking over their shoulder are likely to feel under more pressure and are therefore more likely to make mistakes. Instead, take a step back and trust your employees with their tasks. You may find that giving your team some space is actually a great remedy for inefficiency.
Instead, keep track of your employees’ work by having a weekly one-to-one. Whether it’s a face-to-face meeting or a phone call, this will be a platform to iron out any concerns on both sides.
Upgrade business tools
If you are way behind your competitors in terms of technology, maybe now is the time to update the suite of tools you use to do business. Depending on traditional ways of work isn’t always the most efficient practice. You may find that upgrading your software instead of using staff rota templates, or even introducing the use of iPads in the sales process could improve your efficiency tenfold.
Not only will this improve your overall business efficiency, but it may even improve employee engagement as their jobs become easier and more fulfilling.
Open feedback channels
Giving and receiving feedback is one of the most important parts of running a healthy workplace. As well as giving your employees feedback on their work, you should also open a channel for your team to share comments about how processes could be improved. Two-way feedback communication is also a great way to make your employees feel like their voices are heard within the organization.
Try a suggestion box, or even an employee survey. It sometimes helps to get a different perspective, and your employees may raise something that hadn’t occurred to you.
A recent study showed that working from home one day a week can boost efficiency by 13%. So, why not give your staff a little more freedom? Working from home became the norm in March 2020 amid the coronavirus crisis. Instead of transitioning all the way back to the office five days a week, consider a healthy balance of office and remote working.
If remote working caused by the lockdown didn’t cause your business any harm, you could even consider going fully remote and saving the costs associated with having a fixed office.
Manage time better
Take a look at what you and your team spend the majority of your time doing. Is it attending unnecessary meetings? Replying to emails? Look carefully at how your team communicates with each other and streamline appropriately. There is no need to call a meeting for something that can be handled with an email. Equally, it isn’t necessary to write an email where it could be solved faster with a phone call or face-to-face conversation.
Time-saving activities can even boost employee morale too—where staff manage their time better, they are less likely to need to stay late to finish a task.
Find out what your team’s most monotonous tasks are and see if there is a way to automate them. We are in 2020, and there is a world of software available to support tasks that distract you and your staff members from the more important and inspiring work. As an example, you could give your employees more power over the hours they work with a shift scheduling tool. Or if you run a restaurant, consider automating the ordering process with self-service kiosks.
In a nutshell
So, if you think that inefficiency is a problem in your workplace, take a step back and look at all your opportunities to improve. Could you encourage more knowledge-sharing and productive communication? Is it perhaps time to invest in upgrading your business technology or automating monotonous processes? Is there a lack of trust throughout your workforce, or a need for open feedback channels?
Running a business isn’t easy but managing inefficiency needn’t take up your valuable time. It could be as simple as utilizing a new piece of software that ticks several boxes. For instance, a shift scheduler frees up your time and offers your employees a simple way to communicate the hours they are able to work and when they need to take a holiday.
By actioning small steps, you may find your employees more engaged, your resources up to date, and your organization more efficient overall.