Sluggish economy? There’s an app for that

Todd Hirsch,

The grim warnings roll off the tongues of central bankers and economic gurus: the U.S. economy is in for a painfully long period of slow economic growth. Unlike other post-recession periods, this one is not reacting to the traditional remedies such as lowering interest rates (they’re already as low as they can go), quantitative easing (no one wants to spend the money), or even massive government stimulus spending. The Canadian economy, of course, will be collateral damage if the U.S. continues to languish.

With the usual tools in the economic toolkit unable to get consumers spending again, why not focus on businesses? How can companies boost output, reduce error rates, increase team performance, improve labor relations, cut staff turnover, and increase health and safety?

It’s called workplace literacy
There is an app for that: It’s called workplace literacy.

According to the leading research on literacy, four in 10 Canadian workers lack the necessary level of literacy to understand a safety manual, a set of instructions on a new piece of equipment, or a new piece of computer software necessary for them to accomplish their work.

One recent report on the subject shows that improving literacy scores by one per cent would increase labor productivity by 2.5 percent. Productivity is a topic on which the Bank of Canada and other economist have been tsk-tsking Canadian businesses for years. Abysmally low levels of productivity in this country put us at risk of falling behind the rest of the world, and our standard of living hangs in the balance.

Literacy can stimulate economic activity in other ways, too. With increased literacy comes enhanced creativity and innovation, two things rather useful when encountering problems and challenges on the job. In the best case scenario, creativity will stimulate better processes, improved design, and even brand new inventions.

The big problem with literacy is that few employers identify it as a problem. Low literacy is often confused with being unable to read at all (something which can certainly be an issue, particularly with new Canadians who cannot read either English or French). But literacy goes far beyond simply being able to read. It is about being able to comprehend and synthesize more complex text, and being capable of applying those ideas to everyday life and work.

Yet rather than ramping up literacy and skills training during an economic soft patch, many employers actually cut their investments in this area. The perception is that it all costs too much money and too much time. But by viewing literacy development as an unnecessary luxury that can be chopped when money is scarce, employers are missing the point entirely.

Literacy is not a nice-to-have, it’s a must-have – at least for companies that are serious about boosting productivity, output, and safety. Investing in new equipment and machinery are typically the prescribed solutions to the productivity issue, but what good are these new pieces of equipment if workers lack the necessary literacy skills to properly put them to use?

Requires a bit of finesse
Identifying workers with literacy problems requires a bit of finesse. Telling a worker that he’s illiterate and shipping him off to some training program is probably not the best way to engage him. Rather, investing in literacy requires action on the part of the employer to identify how that worker would like to progress in his job, and then to make sure he gets the right skills training to achieve that goal. In the process, literacy skills are developed.

The most common excuse employers give for not investing in literacy programs is the fear of eventually losing the newly trained and upgraded worker to competitors. “Why should I put money into improving her literacy skills,” an employer may argue. “What if she leaves?” But the better question to ask is: What if she stays?

As the modern saying goes, there’s an app for everything. Investing in workplace literacy may not solve the U.S. credit crisis or the public debt problem, but it will improve labor productivity, workplace safety and employee engagement. And in this sluggish economy, that may be the most useful app of all.

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