The UK, a low productivity nation?

by | Sep 20, 2013 | News

HR can help reverse the country’s decline in productivity, argues Derek Wynne from Cirrus in People Management

Official figures published this week showed the gap in productivity between the UK and the world’s most developing nations growing to its largest level since 1994, with Britain 16 percentage points behind the average across other G7 nations.

So how can Britain stop its decline in productivity? Many economic commentators suggest that businesses can either employ more people or invest in new capital. But there’s another solution, one which can have a dramatic effect on levels of productivity – and it needn’t involve a huge cash investment.

Since financial crisis began in 2007, Britain’s productivity growth has gone into reverse. It’s now 2% lower.

Many business leaders are aware of the well-documented link between employee engagement and productivity. A 2012 Gallup poll found that organisations with a high level of engagement report 22% higher productivity. In the UK, Engage for Success was set up with government support to grow awareness of the power of employee engagement and to demonstrate why it works. Its ‘Nailing the Evidence’ report in particular looks at links between engagement and key business factors such as productivity.

Despite all the evidence, levels of employee engagement are still low in many organisations. However, when we look at those who get it right, there are some common factors. Employees tend to be deeply engaged in organisations where there is a very clear shared purpose and values. Work has meaning – it’s about more than money. The culture in these organisations tends to be open and supportive, and levels of trust are high. Achieving this is down to the leaders. If they can communicate a clear purpose and vision, and act as role models for values, the people around them are more likely to be engaged.   There is – quite understandably – some cynicism around this in the current climate. However, even if you’re operating in a very volatile market, or having to make tough decisions such as cutting jobs, people are much more willing to accept uncertainty and bad news if they are clearly communicated with and feel they are part of the process. Employee engagement can help employers get ‘more for less’ because employees are much more likely to commit discretionary effort – to go the extra mile.  It’s also good news for the employees themselves, who are likely to enjoy much higher levels of job satisfaction.

Click here to read Derek’s article on the People Management website.

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