Quality of work, not quantity of workers, is key to increasing UK productivity
Organisations will fail to boost their productivity unless they prioritise greater investment in workforce development and agile working practices, according to new research by the CIPD, the professional body for HR and people development. Its comprehensive new report, Productivity: Getting the Best out of People, explores the factors that help to explain why some businesses have higher productivity than others and finds that there are clear links between productivity and how people are managed at work.
The report highlights how a clear focus on improving performance can help businesses get the best out of their people. It finds that performance tends to be higher in businesses where there is a focus on higher quality products or services rather than only on low cost and where workplace culture is clearly aligned with the future direction of the business. Investment in workforce training and an intelligent approach to the implementation of ‘smart’ or agile working practices also has a positive impact.
To support this, the CIPD is calling on the Government to demonstrate its commitment to raising productivity by prioritising investment in vocational and further education and skills funding and by taking a leading role in the drive to improve workplace management.
Peter Cheese, CIPD Chief Executive, comments: “Productivity starts with people. Our flexible labour market’s ability to create jobs has exceeded expectations but our report shows that increasing headcount is now the most common way that businesses respond to increasing demand. This has worked well to date and has boosted employment but the labour supply is already starting to tighten and productivity has not been improving. We need a shift in focus towards increasing the value generated by the workforce and how work is organised. This will require a renewed focus on the way people are managed and developed to deliver ‘smarter’, more productive working.”
Mark Beatson, CIPD Chief Economist and author of the report comments: “Productivity in the UK is noticeably low, especially when compared to other developed economies. The reasons behind the UK’s poor performance are deep-rooted and complex. Government investment is vital to increasing productivity but it needs to be broad-based. Big investments in infrastructure like HS2 will not be enough on their own. Decisions over how we fund vocational and further education and support small businesses to raise their game and get more out of their people are just as critical to our future prosperity as investments in transport, infrastructure and technology and need to be given more attention by Government and businesses.”
Despite ongoing productivity concerns, the CIPD’s report found that only 41% of businesses consider increasing productivity to be a current priority. A third (33%) of UK businesses do not currently have any measures of productivity in place and understanding of the term ‘productivity’ itself is patchy – in practice, it is often confused for performance.
The report points out that the quality of management and people practices within an organisation, management-employee relations, trust and employee engagement can all have an impact on an organisation’s productivity yet they have received very little attention from Government. In part this is because these issues fall between the gaps of departmental responsibility and thinking but it’s also because they are seen as ‘soft’ issues, best dealt with by individual companies. The CIPD welcomes the Chancellor’s intention to put productivity at the heart of next week’s Budget, but warns this could be a missed opportunity unless there is a strong focus on workplace productivity and a more joined-up approach across the relevant major government departments.
The CIPD is calling on the government to:
The CIPD is calling on businesses to:
Full press release on www.cipd.co.uk
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