How fleet technology can help boost labour productivity

Before we explain how to increase labour productivity for businesses by using fleet technology, we first need to delve into the present situation of labour productivity and find out why intervention is needed in the first place. Here is the situation in New Zealand at the moment:

Labour productivity during the COVID-19 pandemic

Despite the COVID-19 pandemic having being well underway for quite some time, the economic effects were most severely felt in September 2021 in New Zealand. Compared with the June 2021 quarter, the GDP was down 3.7 %. Industries that suffered include:

• Service industries, which make up 2/3 of the economy = -2.7 %
• Goods-producing industries, which make up 1/5 of the economy = -7.3 %
• Primary industries, which make up the rest of the economy = -3.1 %

The reason for the drastic decrease in GDP at this particular time was because the country was placed on level four lockdown for two weeks. It was the first time the restrictions had been so strict since June 2020. This blow was especially hard as the economy had been doing quite well - the average annual GDP had risen 4.9 % from the beginning of the year up until September 2021.

Despite the disruptions, COVID-19, however, did make businesses and consumers realise the importance of experimentation when faced with uncertainty. 

By being well organised and trying out new ways of working such as working from home and being open to other methods of communication, this helped many businesses survive the pandemic.

Labour productivity prior to COVID-19

In the 2000s, the diffusion of digital technologies escalated and was expected to result in a new wave of productivity growth, like similar ones in the past, e.g. as a result of electrification (from the mid-1880s) and, to a smaller extent, ICT investments (in the 1990s). However, this is not what happened, which has left many people still wondering whether the effects of these new technologies will be obvious later as well as pondering structural factors as well as measurement.

Before the COVID-19 crisis came about, a significant amount of attention was being focused on the decreasing long-term productivity being reported across countries. It was known as the productivity paradox because the productivity slowdown took place at a time of notable technological change. The attention should once again be focused on productivity and gain more importance once recovery from the COVID-19 pandemic fully commences.

After the COVID’s crisis: new scenario for labour productivity

As people work hard to rebuild what the pandemic has taken, it has been forecasted that economic growth in New Zealand will increase to 4.7 % by the end of 2021. 

This increase will be short-lived, however, as it was predicted to slow down to 3.9 % in 2022 and 2.5 % in 2023 as policies and constraints slowly return to normal after the plan to open the border goes ahead at the beginning of 2022. 

However, if the border opening is pushed back for any reason i.e. by certain population groups not receiving the vaccination quickly enough, then this could affect economic growth. 

In many countries, a fat tail of companies with low productivity (composed mostly of small companies) co-exists with large companies that are, on the other hand, very productive and even compete with international businesses. Since large companies find it easier to exploit increasing returns to scale, productivity tends to increase the bigger the company.

Smaller companies need not worry as many are able to trigger productivity growth by implementing new technologies. The pandemic led many companies to adopt digital technologies as shown by the evidence from multiple business surveys conducted worldwide during 2020. The results revealed that most companies, including smaller ones, increased their use of digital technologies during the COVID-19 crisis. 

Also, the increase of the adoption of new technology after COVID was remarkable. This can be seen in the 2023 Fleet Technology Trends Report in Australia and New Zealand.

Nevertheless, among smaller companies there is often a concern about costs and lack of skills and awareness of digital tools, which prevents them from investing in digital technologies. 

A solution to this could be to diffuse digital technologies across companies to prevent the labour productivity gap within economies increasing even further and to ensure that a rebound of aggregate productivity is maintained after the pandemic.

How to help improve labour productivity with fleet technology

GPS tracking systems can help improve your team’s labour productivity through accurate time management by:

• Scheduling jobs in an efficient order to fit more customer appointments into the working day
• Creating optimised routes and updating them quickly for ever-changing traffic conditions
• Knowing the location of each vehicle in near real time in order to send the nearest one to carry out a service
• Tracking timings, eradicating time-wasting and unauthorised use
  
  In fact, according to the 2022 Fleet Technology Trends Report in US, 46 % of businesses in US have improved their productivity since implementing a fleet tracking solution.

How improving labour productivity can benefit the customer experience

Customers are imperative to any business and keeping them happy is more important than ever especially in this modern-age of on-demand service. One way to improve your customer service is to implement fleet technology. This enables you to:

• Respond faster: Use near real-time location data to respond quicker and more accurately to customer queries and to proactively manage delays
• Keep customers in the know: Provide your customers with accurate ETAs and allow them to track drivers to their doorsteps in near real-time

By improving customer service, you can quickly make a difference that helps with customer retention and boosts customer satisfaction. 

In fact,  52% of businesses in New Zealand and 58% in Australia reported improved customer service since they implemented a fleet tracking solution according to the 2023 Fleet Technology Trends Report in Australia and New Zealand.

Sources:

1. https://www.stats.govt.nz/information-releases/gross-domestic-product-september-2021-quarter

2. https://www.oecd-ilibrary.org/docserver/d2c4b89c-en.pdf expires=1641295143&id=id&accname=guest&chec ksum=1A798974EADBD830B71BB7892CB130C9  

3. https://www.oecd-ilibrary.org/sites/f25cdb25-en/1/3/4/index.html?itemId=/content/publication/f25cdb25-en&_csp_=f3624e8b770eac8d5dc12a37d86e806e&itemIGO=oecd&itemContentType=issue#section-d1e1559

4. New Zealand Economic Snapshot - OECD

5. https://www.oecd-ilibrary.org/sites/f25cdb25-en/1/3/4/index.html?itemId=/content/publication/f25cdb25-en&_csp_=f3624e8b770eac8d5dc12a37d86e806e&itemIGO=oecd&itemContentType=issue#section-d1e1559

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