Speaker:'Now, let's move on to the second part of the presentation, the causes of the increase in relative staff costs. Earlier I mentioned that relative staff costs have increased by over 10% for the top 100 UK companies over the last 5 years. And how this has and will damage the competitiveness of companies.
So, the question is why? Are staff lazier than before? Or are companies failing to understand both how their staff think and which management techniques are out-dated in the modern changing world? Although the first factor, does have an impact, I would argue that the second is by far the most important factor, which in fact contributes to the first. Allow me to explain.
Although this may sound surprising to you, People are inherently lazy. It is undeniably true that people would prefer to do less and earn more. Numerous studies have been carried out in the work environment which clearly demonstrate this. And this is something which we must take into consideration when considering the true cause of the relative increase in staff costs.
We find ourselves in an ever more rapidly changing world. There can be no question that information technology today dominates most of our working lives. Whereas 30 years ago, the majority of the tasks in the office had to be carried out manually, by hand, today everybody has a powerful computer, which can carry out complicated and multiple tasks. Tasks, which in the past would require a team of people working on for days, can now be done by one member of staff in minutes.
But while most companies have embraced these advances in information technology, they are still using management techniques and processes which were designed 30 or more years ago. Designed in a time when people were still using typewriters and had to wait for hours in the office for an important phone call. But today, rather than having to hold numerous meetings to inform staff of changes, you can just send them a global email. It would seem obvious that these advances in technology save us money. But do they really?
I would like to show you a chart, which shows the amount of physical communication between managers and staff, actually talking face to face, for a well-known American company. As you can see, the average number of hours of physical communication per week fell from 15 in 1995 to 8 in 2007.
Furthermore, physical communication between staff fell at a similar rate. And the only answer for this trend can be because of the increasing use of technology. This lack of physical communication leads to a sense of isolation on the part of the staff, not only from their managers but also from their colleagues. Which impacts their motivation and more importantly, their commitment.
Let us go back to what I said earlier about people being inherently lazy. If people are happy to do nothing and at the same time, they don't feel important or needed in a company, what will they do? What would you do?
And this combined with less direct physical communication with their manager, gives them greater opportunity to do the minimum and waste the rest of their time chatting on Facebook.
I would just like to point out that I'm not recommending returning to a time where we didn't use IT in the work place.'