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BLS: Increased productivity is due to decline in hours worked

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Dive Brief:

  • Labor productivity increased 3.7% in the second half of 2023, according to the U.S. Bureau of Labor Statistics, driven by a decline in hours worked and an increase in output, with no loss of employment.
  • The decline in hours worked is the first since the second quarter of 2020, BLS said, with a 1.3% decline in average weekly hours.
  • However, unit labor costs (the ratio of hourly compensation to labor productivity) still rose, reflecting the continued rise of hourly compensation, even in the face of improved productivity.

Dive Insight:

Worker productivity has been a hot-button issue in 2023, with many laying the blame for its decrease on remote work. In June, a study out of the Federal Reserve Bank of New York said that workers who moved from the office to remote work at the start of the pandemic saw a 4% decrease in productivity.

That study was based on call center workers at a Fortune 500 company, however; other experts pointed to larger productivity losses being more tied to worker exhaustion in the wake of the pandemic and its various stressors. To figure out the core of productivity issues, employers may need to focus on building rapport with employees and ensuring they feel taken care of, experts previously told HR Dive.

Notably, return-to-work mandates could worsen retention and make hiring worse, according to a survey from The Conference Board. For employers concerned about productivity measures, the report suggested a return to the office may not be a cure-all. Remote employee surveillance, likewise, can deter productivity, according to a Glassdoor survey released in July.

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