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It’s fair to say that the economic
downturn has heightened the UK’s
productivity crisis, something which
the LSE’s Centre for Economic
Performance (CEP) describes as
“probably the greatest challenge
facing the UK economy”.
Last month, the UK’s poor productivity
was acknowledged by the Bank of
England, which cut its forecast for
productivity growth this year to 0.25%
from 0.75%. Even in 2016, the Bank
anticipates productivity growth of only
1.75%, a figure significantly below the
2.75% average for the 10 years preceding
the crisis.
Here,
PITR
asks a number of industry
experts for their thoughts on the
productivity crisis and their suggestions
for improving efficiency, whether that’s
through increasing salaries, adopting (or
restricting) the use of digital channels
for communication, or upping employee
engagement strategies.
Michael Burke,
Managing Director
,
Purpose Software
“People work for reward, so at a time
when this is low, such as a zero salary
increase or 1-2% at best, perhaps the
reward for working hard is not sufficiently
motivating.
“Sometimes fear is a good motivator,
but this is not effective when the
employment rate and job security are high.
As inflation returns and salary increases
grow, productivity will return. Whilst a
2% pay rise when inflation is 0% and a
4% pay rise when inflation is 2% give the
same net increase, 4% sounds greater and
is more motivating.”
Steven Steenhaut,
Senior
Marketing Director EMEA,
Nuance
Communications
“The drop in the UK’s productivity is a
concern, and a baffling one at that, given
that Britain grew faster than any other G7
country in 2014.
“Reasons often cited for the productivity
fall acknowledge that the country has a
surplus of workers, and related to that are
the issues of zero-hours contracts, low pay
and job security. These could be factors
that affect staff motivation, which in turn
impacts their productivity. Furthermore,
when labour is cheap and easy to find,
businesses can be reluctant to make a
capital cost investment in productivity-
enhancing technologies, choosing instead
to opt for low-paid and dispensable staff.
Arguably, that strategy is detrimental to
both short- and long-term productivity.
“Meanwhile, some industries are
working harder to achieve the results they
used to enjoy in more buoyant economic
times. A car dealership is a good example:
in a recovering but still sluggish market,
its sales team is probably making more
calls than ever before, but it’s probably not
experiencing a relative increase in actual
Official figures from the ONS show that UK labour productivity (measured by
output per hour) fell by 0.2% in the fourth quarter of 2014 compared with the
previous quarter, and remains slightly lower than in 2007, prior to the global
financial crisis.
Is there a crisis in
productivity?
sales. The effort you put in isn’t always
reflected in actual sales results or output.
“What makes this productivity
conundrum so surprising across all
industries and sectors, is that it has
happened at a time when there is so much
affordable technology available designed
to drive efficiency in the workplace.
“Let’s take Small to Medium Businesses
(SMBs) as an example. A recent report
compiled by Marketiers4DC shows that the
efficiency of SMBs in the UK is – in part –
being hindered by the management and
creation of text-based documents, including
reports, contracts, funding applications,
tender documents and marketing collateral.
This really needn’t be the case given the
considerable progress made in efficiency-
driving and proven productivity-boosting
solutions including accurate desktop
speech recognition technology like Dragon
NaturallySpeaking and much more
affordable PDF solutions, like Power PDF.
“The report, entitled
Better technology,
greater efficiency
, hints at another reason
behind the productivity bottleneck: 41%
of SMBs stated they don’t have the time
to consider what potential improvements
they could make to their efficiency and are
unaware that productivity improvements
could be driven by simple IT upgrades.
“However, it also showed that a
barrier to them actually achieving greater
efficiencies is the rate at which they review
The effort
you put in
isn't always
reflected in
actual sales
results or
output.
continued...
Steven Steenhaut,
Senior Marketing Director
EMEA,
Nuance Communications
