Greek companies are getting a new tool to answer a basic but often difficult question: How much economic value are they actually creating with the workers and capital they employ?
SEV, Greece’s leading business federation, has released a productivity-measurement guide designed to turn data companies already collect into a practical management tool. Developed with the Foundation for Economic and Industrial Research, or IOBE, the framework allows businesses to track productivity over time and compare their performance with peers in Greece and across the European Union.
At the center of the methodology is gross value added, or GVA, a measure of the economic value a company creates through its own operations. In simplified terms, it is calculated by subtracting intermediate goods and services consumed in production from the value of output.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
Most of the necessary data can be drawn from a company’s income statement, balance sheet and accompanying notes, meaning businesses don’t need to create a complex new reporting system.
Once GVA is calculated, companies can connect it with the resources used to generate that value.
For labor, SEV recommends converting employment into annual work units, broadly equivalent to full-time equivalents, or FTEs. That puts full- and part-time workers—and, where necessary, hours worked—on a comparable basis across companies and years.
Dividing GVA by FTEs produces one of the guide’s main metrics: value added per employee. SEV considers it more useful than sales per employee because it is less affected by differences in purchased inputs or by how much of a company’s production is handled in-house.
The framework also measures productivity against labor and capital costs. Dividing GVA by total payroll expense shows how much value is generated relative to labor spending, while comparing GVA with net fixed assets indicates how productively a company is using investments in machinery, equipment and other assets.
In practice, companies need four core figures to begin: value added, payroll costs, employment in FTEs and net fixed assets.
The guide emphasizes that the direction of productivity over time can be as important as the headline number. An increase in value added per employee could reflect stronger output, changes in staffing, greater capital use per worker or broader efficiency gains. A decline might follow hiring that has yet to generate additional output or investments that haven’t yet begun producing returns.
Companies can also benchmark labor productivity using their NACE industry classification and size against comparable businesses in Greece and the EU-27.
SEV cautions, however, against treating such comparisons as simple rankings. Differences can reflect business models, product mix, outsourcing, capital intensity or company size rather than efficiency alone.
