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The UK Is Lagging Behind When It Comes To Productivity – Make Sure Your Business Isn’t!

June 17, 2015

There’s been a lot of debate about the UK’s poor productivity & it seems to be the general consensus that productivity is the country’s greatest economic problem.

We work long hours but with lower pay than other comparable countries and in a recent article by This is Money Alex Brummer states that the labour market is the reason for today’s productivity issues. According to Brummer “The availability of labour made it cheaper for corporate Britain to invest in jobs rather than plant, which is why the UK’s current unemployment rate of 5.5 per cent is half the average of 11.1 per cent in the eurozone”.

George Osborne was recently quoted as saying “We don’t export enough; we don’t train enough; we don’t manufacture enough; we certainly don’t build enough; and too much of our economic activity is based here in London”.  This clearly shows there is room for improvement.

There has been independent inquiry into the world of work by Ed Sweeney and supported by the Smith Institute and in it they state that “A high level of employment is obviously critical to national economic success. But better-paid, more productive work is also key to the nation’s economic recovery. Repairing the public finances, for example, demands higher fiscal revenues, in part fed by higher wages. Continued sluggish wage growth is clearly affecting wider society and holding back the economy”.

And I have to agree with a statement in the report which says “Happy and productive people equals growth” which is something I want you to bear in mind when looking at the productivity within your own business.

The graph below outlines various different countries & how productive they are:

UK Productivity

As you can see the UK are lagging behind. It would be interesting to understand the reasons & ethics behind Norway’s success!

The debate about productivity covers a broad range of micro and macro economic issues. I focus on those that SME owners can influence themselves. My advice is based on working with many SME owners. Check out this graphic, developed at Roffey Park, a UK Leadership Institute:

Challenge support leadership

Where Are You And Your Business Positioned On This?

High challenge and high support – Workers are trusted but there are high expectations of them. Everybody knows what needs to be done and there is support for all to be able to do their best.

High challenge and low support – High demands on workers to deliver but Managers give no direction and focus excessively on output.

Low challenge and high support – A paternalistic environment but not much gets done, poor performance is not addressed.

Low challenge and low support – workers are not challenged so people get away with poor performance. Managers just leave people to get on with the job but offer no support or direction.

It comes as no surprise that the high challenge / high support leads to the greatest level of productivity and innovation.

Here are some tips to help your business to get to this level (if of course you aren’t already there!):

  • Focus on employee engagement and building high morale – lots to do here but make a start;

  • Drop the “command and control” mindset – you can’t know everything or do everything yourself. Telling people what to do all the time never generated a new idea or got workers to give a little bit extra;

  • Create learning and improvement opportunities – people feel better and work better when they can be better versions of themselves. That working better increases your productivity;

  • Be really clear on expectations of your workers. If they know and agree what constitutes good work and output and what the measures of success are then there’s a much better chance that they’ll get there.

You might find a few more useful tips from these productivity articles too:

4 Methods To Increase Employee Productivity

11 Things You Can Do To Increase Employee Productivity

And if you’re not sure how your business is performing why not take our short assessment which will provide you with a very useful insight!