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How to fix productivity? Software, obviously!

(Image credit: Image source: Shutterstock/TechnoVectors)

The software that fundamentally shapes the future won’t be announced to great fanfare, instead it will be built stealthily and quietly. The next wave of world-leading software and tech solutions won’t be loud and super sexy: backends for flying cars, trips to Mars or sneaker delivery drones. Instead, the most transformational wave will be the software that eliminates “grunt work”: work that is still being done – inexplicably, and at great cost – by humans.

To use an example that, for me, is close to home: the HR market has barely begun digitising. In my home market, France, most companies do not use any digital tools that help them manage this core part of the business. Anecdotally, over nine in 10 companies are still using pen and paper to manage payroll, expenses, holidays, and the onboarding of new employees. This is indicative of other European countries, too.

This is a particularly ‘big deal’ when you consider how critical the HR function is throughout the lifetime of an employee. If, at any point, the software being used to manage their journey isn’t good enough, an employee’s experience can be severely negatively affected. Perhaps even ruined.

If a potential hire is not kept in the loop with progress as the Candidate Tracking System system is a dumb-spreadsheet rather than a simple software solution; they could become dissolousioned and join a competitor. If requesting holiday or medical leave is a complex and perhaps invasive process, rather than a simple and seamless portal, employees may feel uncomfortable request time off that they deserve and need. And, very critically, imagine if their software controlling payroll had an off day and the team didn’t get paid! There would, understandably, miss mass discontentment in the ranks.

When your team is smaller, the impact of these negative experiences is magnified. In the UK, and it is a similar story all over Europe, small and medium-sized businesses (SMEs) make up over 99 per cent of private business, and account for almost half of all business turnover. These companies have barely begun digitising.

Maxing data

Global venture capital investors Andeeson Horowitz proudly declare that ‘software is eating the world’. I tend to agree with them, but the ‘meal’ is still in process. Software hasn’t begun the main course as yet, it may not have finished its entrée.

It is not the case that software has penetrated most corners of business and is speeding up and smoothing processes that have been paper-based for centuries -- software has only been around since the 1970s, and we are still on a very early iteration of Web 3.0. Its penetration of markets is still very minimal.

Why is this a problem? Because if these wheelhouses of economies are not freeing up employees’ time via automation, they are committing them and their businesses to being less productive.

And this is important. Productivity isn’t some vague or undefined thing: commonly, in industry, it is calculated as the amount of output created, or work produced, per working hour. In the UK, a market into which my company has recently expanded, it is a national preoccupation. Stagnant productivity growth is something petrifying business owners all over the country, especially with Brexit on the near horizon.

Making productivity gains is more important than ever, so it is a mockery that so many businesses aren’t making simple time-and-labour-savings that could be achieved with very simple software.

These software-as-a-service (SaaS) tools are not necessarily sexy, but they do the work and enable us to form the connections that we otherwise would not have, or which would take longer. We know that when employees are using the right tools, their productivity skyrockets – in other words, SaaS is transforming how much work the individual can get done.

Building an end-to-end service means SaaS companies can maximise data for their customers, generating information for customers that, historically, they would never have had access to. In the HR industry, that might be, for example, real-time diversity reports, comparing their workforce two years ago to today, and helping them build the teams they want.

Transforming the workplace

In April of this year, we surveyed employees across companies in France, Germany and Spain who use digital tools already. Across the board, almost 90 per cent of respondents said these tools save them time. Similar numbers said using them puts them back at the centre of their professional lives.

This is important. We no longer live in an age of enterprise versus consumer software: the software people choose to use at home – Dropbox, G Suite – are the same tools they use in the workplace. Moreover, the software that has spread like wildfire across the professional world – think Slack – engenders the same interactions as the social tools of our private lives, speeding us up in the process. Before Slack, it was simply harder to cooperate in the workplace. The integration of real-time messaging, cloud storage and analytics services makes email look clunky and one-dimensional.

What this means for SaaS companies is that building for customer efficiency, and thus productivity gains, means building both vertically (i.e. for different industries) and horizontally (i.e. adding more functions to your product to service your existing customers even better). Products that used to be built for just one customer, or offering just a light infrastructure layer, now need to spread wide and deep; they need to suit enterprise clients and consumers – and the meeting point of those two groups is the SMEs who employ such large swathes of the population.

People worry that automation will kill off jobs. It won’t; it will change what people are doing in the workplace, and build in seamlessness between their working and home lives. And what is more, it will be employees demanding this shift. Like all change, the productivity puzzle will be cracked on the ground.

Firmin Zocchetto, CEO, PayFit

Firmin Zocchetto is the CEO of PayFit, a software company in the HR industry that employs over 400 people in France and the U.K. Firmin was also recently included in the Forbes 30 Under 30 Europe cohort for 2019.