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.

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 had released a report, Productivity: Getting the Best out of People, which reveals why some businesses have higher productivity then others and found a link between people’s performance levels and how they are managed.

Peter Cheese, CIPD Chief Executive, said: “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.”

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.

CIPD is urging the Government to prioritise investment in vocational and further education and skills funding, provide better support and funding to businesses and align the UK skills policy to enables businesses to move into higher value market segments. ​

Mark Beatson, CIPD Chief Economist and author of the report said: “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.”


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