Underutilized workforce capacity may be costing CFOs millions

Yahoo

2 days ago

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American businesses are losing millions in productivity each year, often with most CFOs not realizing it.
The analysis is from workforce productivity software provider ActivTrak's Workforce Utilization Benchmarks Report 2H 2025, which analyzed 5,619 organizations and 304,083 workers and found that companies operate at just 87% of expected productivity.
Across industries, this translates to the equivalent of 130 employees per 1,000 workers producing no output — or $11.2 million in wasted salary annually per 1,000 employees. For CFOs facing tight margins, talent shortages and pressure to optimize every dollar, the findings highlight how much value can be unlocked by keeping teams motivated and productive.
The hidden productivity gap and the state of work
ActivTrak CFO Jana Wilson told CFO.com the findings underscore a growing challenge not only for businesses operating in all types of work structures, but also for finance leaders trying to do more with smaller teams.
'Many finance teams are operating leaner than ever because of talent shortages, and automation can only fill so much of the gap,' Wilson said. 'Workforce utilization data shows leaders where they're getting the most out of their people and where capacity is being left on the table. That insight allows finance leaders to redeploy resources with precision instead of over-hiring or over-relying on technology without clear ROI.'
The report found that nearly six in 10 (58%) employees fail to meet daily productivity goals. For Wilson, that was the most alarming finding.
'CFOs tend to assume their teams are operating at full capacity because financial results often mask underlying inefficiencies,' she said. 'Our analysis shows there's significant untapped potential, particularly in back-office roles where contributions are harder to measure but critical to operations.'
Even small inefficiencies multiply at scale, according to the report: Organizations with 251 to 1,000 employees lose $1.3 million to $1.7 million annually, and enterprises with more than 1,000 employees see losses of $3.7 million to $3.9 million per year.
Industry comparisons reveal where the losses are concentrated. Computer hardware teams have nearly 71% of employees below productivity goals, the highest rate in the report. Aerospace organizations face the greatest untapped capacity at 19%, with average productivity losses of $1 million annually per company. On the other end, logistics organizations have the lowest rate of underperformance at 41% and the least untapped capacity at 9%.
'Workforce utilization data provides a place to start and helps leaders see how time is being spent and whether activity is aligned with company priorities,' Wilson said. Data also indicates that for finance leaders balancing lean teams and automation, the ability to pinpoint underutilization is key to avoiding common challenges in contemporary finance like poor hires or investments in technology that do not deliver ROI.
How CFOs can measure and respond
Wilson said CFOs should start with a simple approach to productivity measurement. 'Focus first on the work that directly ties to business outcomes — how much time is spent there versus low-value tasks? That alone can highlight where capacity might be misaligned,' she said.
She cautioned that capturing accurate workforce data is difficult for CFOs if they don't have proper systems designed for it. 'It's very difficult to collect this data or calculate productivity metrics consistently without a system built for it,' Wilson said.
'Workforce analytics tools make it easier to capture the right data objectively, but the real value comes from how you use it,' she added. 'Treat productivity metrics like financial metrics: Track them consistently, benchmark them and use them to drive action, not just as a reporting exercise.'
Wilson added that workforce insights can also support morale and engagement. 'Help people see how their work contributes to the bigger picture, especially in back-office roles that don't always have a direct line to revenue,' she said.
'Be transparent about the why behind decisions and use data to show teams how they're performing against benchmarks,' she said. 'That clarity builds trust and engagement. Finally, create space for feedback and recognition — when people feel heard and valued, they're more resilient during change.'
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