Unproductive Employees Costing German Companies

A recent study may have shattered the long-standing stereotype of Germany being a country of hard-workers. One-third of the labor time spent in German companies is unproductive, according to a report by Proudfoot Consulting.

The lost time, consumed by cigarette breaks, chatting and useless meetings, added up to a national loss of 219 billion euros ($282 billion) in 2004 -- nearly 10 percent of the gross domestic product.

"The concept of economizing has got a bad rap in Germany," said Friedrich Kerker, a professor from the Institute for Applied Innovation Research at the Ruhr University in Bochum.

Companies invest savings poorly

At the well-paid management level, countless meetings are held without tangible results, quickly eating up resources that may have been saved through other belt-tightening efforts.

"What many companies frequently do wrong is that they poorly distribute the funds they've saved," said Kerker. "That means they don't invest in the future, in building up new business segments or developing and implementing new products. Instead, the money is eaten up within the existing organization."

Managers also are spending too much time on the wrong topics, according to Germany's Proudfoot head Jochen Vogel.

"The managers have too little time for the actual management tasks," he said. "And they too seldom go into the factories to talk to the employees."

It's not only large corporations that are guilty of squandering labor time and manpower. The service sector also wastes precious resources, according to Kerker.

"Let me give a basic example -- renovating a bathroom. That involves several different trades, like the plumber, mason, tile layer, painter and electrician, for example. And lots of time and money are wasted," he said.

The private customer is often overwhelmed by trying to coordinate these various jobs and ends of paying higher prices for the craftsmen's inefficiency.

Human productivity has its limitations

Untapped productivity has led to 12-figure national losses or about 32.5 wasted days per employee each year, according to the study, but at the other end of the spectrum, 100 percent productivity is simply not humanly possible.

Employees need time to recover and should have opportunities outside of work to develop their skills, Kerker said.

In Germany, a country poor in natural resources, the economy runs on information and ideas, which makes the employee, and interpersonal communication between employees, even more important.

The communicative coffee break, then, may contribute more to productivity when practiced in moderation than if it were to be eliminated altogether.