IT seems that we finally have an answer to why productivity is falling in Britain – and no, it has nothing to do with the fact that so many of us are spending so much time watching the Olympics. The problem is much more prosaic and far more devastating: we are spending so much time emailing each other that there is very little time left to do anything else.
Many people already suspected as much, but McKinsey has crunched the numbers. It finds that 28 per cent of office workers’ workweek is spent reading and answering email. Over a year, the average “interaction office worker” (management consultant speak for your normal white collar employee) spends 650 hours of “work” time on email, in most cases staring at a Microsoft Outlook screen. The study is based on US companies but undoubtedly applies equally to firms here in Britain.
To make matters worse, emails aren’t even enough to make sure employees have all the information they need. They spend 19 per cent of what is left of their week gathering information and 14 per cent on communicating and collaborating internally. It is hard to see how anything actually gets done in a modern office environment. The McKinsey research suggests that only 39 per cent of the average work week is actually spent on role-specific tasks.
The consultancy’s big idea is to make much more use of specially tailored internal social media and technologies, with many existing emails instead becoming searchable messages open to all staff. It thinks this could slash the time spent emailing, communicating and researching and boost productivity by 20-25 per cent, equivalent to $900m-$1.3 trillion across consumer goods, retail financial services, advanced manufacturing, and professional services alone.
This may be right, of course, but it would be interesting to see how much time people are currently wasting on Twitter and Facebook, not all of which is useful, to put it mildly. Anybody who is able to tackle the mad communication overload will be on to a winner.
EITHER TOO HIGH OR TOO LOW
IF you still don’t think there is something very wrong with the global economy, consider this frightening fact: Unilever yesterday borrowed $450m for three years at a record low 0.45 per cent interest rate, according to Bloomberg data. Yes, that’s right, I’m never happy: I tend to find most yields these days either horribly high (think of Spain or Italy) or horribly low (supposedly safe credits). Both extremes are terrifying and suggest that the world is going to hell in a hand basket.
Take the ultra-low case. Unilever is a good company, of course, and it has done well to raise capital so cheaply. But the fact that so many people are willing to part with money in return for so little – buying at the height of a bond bubble – means that investors are terrified to trust other borrowers (including Eurozone nations), have few alternatives, increasingly prefer some large corporates to large governments, assume that economic growth is going to be extremely low or non-existent over the next few years and therefore are extraordinarily bearish about the state of the world.
Given that inflation is more than the yield on the Unilever bonds, it means that risk-averse investors are perfectly happy to accept negative real returns. Forget about making money or even capital preservation: the new normal seems to be to accept small but inexorable annual losses on one’s capital, unless one wants to gamble all on buying Eurozone bank shares. If the bond markets are right, we are in real trouble.