When a business is not producing as much as it should, the first response is usually to hire. More people look like more capacity, and a vacancy is a concrete thing to fix. Sometimes that is the right answer. Often it is the most expensive way to avoid a different question: how well is the existing organisation set up to do the work?
Headcount is an input
Productivity is the relationship between what an organisation puts in and what it gets out. Adding people raises the input. Whether output rises depends on structure, management, systems and clarity of work. If those are weak, a bigger team simply produces the same problems at larger scale, with higher cost.
Where productivity is really decided
Several features of an organisation shape how much work gets done well. These are views, not measurements, and each should be checked against the facts of the business.
Structure. Too many layers slow decisions and blur accountability. Spans of control that are too narrow create managers with spare time who find work to supervise. Spans that are too wide leave people without support.
Management quality. A great deal of lost productivity sits in the daily work of supervisors and middle managers: how clearly they set priorities, how well they give feedback, and how they handle problems. This is rarely addressed because it is difficult to measure and uncomfortable to discuss.
Clarity of roles. When it is unclear who decides, tasks bounce between people and teams, and work is repeated or dropped. The cost shows up as delay and rework instead of a line in the budget.
Systems and data. People with poor tools, scattered information and manual processes spend a large share of their time on tasks that add little. Fixing this often releases more capacity than hiring.
The next person you hire inherits the organisation you already have.
Why it is hard to address
Productivity problems are spread across the business and nobody owns them. They do not appear in a single report. Addressing them means questioning how managers manage, how work is organised and what the business has been tolerating, which is more uncomfortable than approving a vacancy.
What leaders can do
Begin with the facts. Understand the workforce cost, its structure and how work flows. Compare similar teams and ask why they differ. Before approving a new role, ask what problem it would solve and whether a change to structure, process or management would solve it more cheaply.
Treat management capability as a business matter, not a training topic. Be specific about what managers should do, give them support and expect results.
Invest in systems after the structure and the work are clear, not before. Technology applied to confused processes does not improve them.
A question for the headline
This article puts forward a view, not a measurement. Whether organisational productivity is the main people challenge for businesses in Indonesia is a question that should be tested with evidence. For any individual business, though, the same question is worth asking: if you could not hire anyone next year, what would you change to get more done?
Thinking about this in your own business?
Talk to Catalyx about HR Advisory