BRACKNELL, UK (25 April 2013) – An overwhelming body of statistics shows that, five years into the current economic slump, businesses are facing an unprecedented productivity decline but individual companies have the means to improve their own output rate through effective Customer Relationship Management, as indicated by a new study from CRM solutions provider Maximizer Software.

In the report, entitled The Productivity Puzzle, Maximizer analyses statistics from the European Union, the United Kingdom, other government organisations, independent research firms, global companies and think tanks. The report notes that productivity in Europe is at a five-year low, while other markets, such as South Africa, face an equally daunting productivity crisis. The situation in the UK is unique in that output is falling while employment levels have been at an all-time high.

Specific findings include:

productivity levels across Europe have dropped every year since its economy went into recession in 2008, according to the Eurostat Labour Productivity Index;

the continuing decline of productivity in the UK – where it is languishing 3.7% below its pre-recession peak – is outlasting output drops that followed the recessions of 1973, 1980 and 1990 by considerable margin, records from the Office for National Statistics show;

South Africa hit a 46-year low in productivity in 2012, according to figures from the country’s largest recruitment company, AdCorp.

The report details the underlying causes of the productivity plunge. Some economists have flagged up ‘labour hoarding’ as a key factor, noting that many employers are holding onto expertise to see them through the tough times. In its 2012 Labour Market Outlook, the UK’s Chartered Institute of Personnel and Development reported that almost a third of businesses maintained higher staff numbers than needed so they could achieve established production levels – and two-thirds of those companies said they were holding onto workers to maintain their organisational skill level.

Maximizer also found that, as businesses extend their operations to maintain revenues in the face of an increasingly competitive business environment, they are concentrating their hiring efforts on sales, marketing and customer service in order to retain existing clients and win new prospects.

The report demonstrates that a proven way to boost productivity in the customer-facing departments is through the adoption of advanced CRM systems. Maximizer quotes research from AMI Partners in 2007 which showed that companies with CRM systems generated revenues that were 260% higher overall, and 140% higher per employee, than those without. The report outlines ways in which CRM boosts productivity, noting that these systems:

provide sales automation and more immediate access to real-time customer data, freeing salespeople from non-productive tasks such as admin and arming them with up-to-date information, so they can stay focused on closing deals;

enable customer service teams to view entire client histories in order to keep updated on the progress of any issues, saving time and avoiding duplication of effort;

can include mobile functionality, which gives employees access to data wherever they are working, boosting the efficiency of sales teams  and others in the field;

ensure that marketers have the tools needed to hit the right prospects and customers with the right communications at the right time – while enabling them to weed out poor targets that represent a waste of time and resource;

give managers and directors access to complete and up-to-date information from across the business through customised dashboards showing key metrics and other critical data.

Mike Richardson, Maximizer’s managing director, EMEA, comments: “This report makes clear that productivity is stagnating across Europe, including the UK where, despite rising employment levels, profitability at many companies remains threatened by falling output rates. This productivity crisis is not just an issue for governments to address, but a problem that individual companies – from global corporations to small and medium enterprises (SMEs) – need to deal with themselves if they plan to remain competitive in a tough, globalised marketplace.

“Given that the research reveals a concentration of new hiring and expansion of effort in sales, marketing and customer service staff, this is the first place that companies need to work to improve productivity – and CRM is a proven way to do that. An advanced and comprehensive CRM system enables businesses to ensure that their existing customers are well serviced and satisfied, while freeing up sales and marketing people to spend more time upselling and cross-selling.

“Keeping ahead of the game is crucial in the current difficult economic environment. As this report demonstrates, CRM is a critical business tool for companies intent on increasing productivity to gain an edge over their competitors and ensure long-term success. CRM allows businesses to cut out inefficiencies and focus attention on what matters: building better relationships with existing customers and finding prospects that will be profitable and loyal.”