By Benjamin Fellows, Project Leader
We Brits are experts at rationalising the poor productivity that has plagued our economy for decades. But with the imminent possibility of leaving the European Union, surely now is the time to stop making excuses and do something about it.
Improved productivity benefits all components of a country’s economic machine. Employees can work fewer hours for the same output, businesses can achieve better margins with lower costs and the government can generate more tax. So it’s surely a challenge worth tackling.
At Renoir, we often find that the solutions for addressing poor productivity within an organisation lie with people and process.
According to the Office for National Statistics (ONS), ‘The relationship between management practices and productivity is receiving growing attention, both in terms of the theoretical literature and in empirical studies’.
One popular theory is that under-trained managers are a major cause of the UK’s lagging productivity.
On a national level, the UK government should work with employers to increase apprenticeship and work experience opportunities. That will help to counteract the deep-rooted problem with disparity of educational access and get junior employees off to a strong start.
Employees in the UK today tend to move between organisations quite frequently. This can act as a disincentive for businesses to invest in training, as it might be their competitors that receive the benefits. This contrasts with Germany, where there are lower levels of employee turnover, and where employers offer strong vocational training and greater flexibility for employees to move between roles within the company.
If they want to improve productivity within their organisations, UK businesses must provide employees at all levels with the training and education they need to work more smartly. And of course it’s vital to invest in training for newly promoted management, to make sure they are equipped to excel in their roles.
Streamlining operational processes is a powerful way to increase productivity. So in addition to providing appropriate training, it’s important for businesses to optimise their processes and the way they are performed.
For example are all the tasks employees carry out actually necessary and adding value? Are some tasks being done in inconsistent ways? Are two or more departments doing the same thing using different processes? And is the same work unnecessarily being done twice, or more? All these things can reduce productivity.
The best way to identify these opportunities for improvement is to listen to the frustrations of employees.
In my current project we found that low productivity within the client’s purchasing team was having a knock-on effect on the productivity of employees in other functional areas. Through process redesign we enabled the buyers to achieve a productivity increase of 500%. The client has since launched initiatives to identify similar opportunities in other areas of the business.
Making it happen
Low productivity is a major challenge for the UK, but organisations there and elsewhere are in a strong position to do something about it. Employee training and development along with process interrogation initiatives should help employers resolve these issues internally, which will contribute to the nation’s overall productivity.