The productivity puzzle

Our Business Jury, comprised of HR and People specialists across industry sectors, discuss what can be done to improve productivity in a rapidly automating world.

Official figures show that UK productivity has stagnated since the financial crisis and lags behind many other developed nations.  But why? And what can be done about it? With people at the heart of this issue, we brought together a diverse range of businesses to discuss productivity from a workforce perspective to hear views from the front line.  
After an interesting debate, facilitated by Katie Derham, the ‘jury’ presented its conclusions to representatives from the Department of Business, Energy and Industrial Strategy (BEIS). 

Here’s what the jury told us:

  • While productivity growth has stagnated in the UK since the financial crisis, the UK’s performance is broadly in line with other nations.  There’s a risk that too much negativity around this issue could become a self-fulfilling prophecy
  • The skills of new recruits are a particular issue for businesses.  It’s not just about so-called STEM skills.  Many people joining the workforce lack the softer skills crucial for today’s working world, including collaboration, resilience, and most importantly, adaptability.
  • A closer partnership between business and schools could help to address the deficit between what businesses need and the skills that school leavers and graduates learn
  • Business are keen to help.  Government support for mentoring, and a structured policy for work experience for all schoolchildren could also make a big difference in developing workplace skills at an earlier stage
  • The Apprenticeship Levy is too restrictive and arguably counterproductive. Broadening it to support different types of training would make a real difference.
  • A more flexible workforce is often a more productive one, but infrastructure – particularly slow broadband speeds is a big problem.  More Government investment is vital.  It would also help to have more communal workspace options for younger people.   
  • Clarity on worker/employee status is essential – businesses would also like to see a roadmap for the Government’s future direction on workplace legislation and industrial strategy, rather than disruptive incremental changes.
  • While many businesses are working hard to introduce wellbeing programmes and raise awareness of mental health issues at work, they worry about the lack of medical support for those who need help.
The UK's performance is broadly in line with other nations
There’s a risk that too much negativity around productivity could become a self-fulfilling prophecy
1/3 of UK workers currently have a health, wellbeing or mental health issue
Wellbeing is strongly linked to productivity, 83% of workers feel that their wellbeing influences their productivity

What next?

Education, and making sure that new recruits have the right skills for business, remain a big challenge for the UK.  There are good examples in practice of business working closely with universities and more needs to be encouraged.  The UK has a light touch in terms of regulation around working life but the risk with some working models was that flexibility was used as a way of transferring risk from employer to worker.  We need to retain flexibility but also to protect the most vulnerable.

Change couldn’t happen quickly; any solution must work for workers and businesses, and change would involve detailed and lengthy consultation with both. The Jury’s still out. 

Contact us

Marissa Thomas

Head of Tax, PwC United Kingdom