Productivity: Newspaper Claims "HR Is Strangling The Economy"
On the 11th December 2023, the Daily Telegraph published an article entitled: "How HR is strangling the economy". In the article, it was asserted: "The rising cost burden of HR in Britain has coincided with stubbornly low productivity. Workers’ output per hour has grown by just 0.4pc annually in the years since the 2008 financial crisis, less than half the rate of the 25 richest OECD countries."
Low Productivity
However, as we highlighted in this article, the main cause of the UK's longstanding problem with low productivity compared to other G7 / top OECD economies is the lack of investment in skills training and new technology.
As the Chief Executive Officer at City & Guilds Group, Kirstie Donnelly, points out: “Low productivity and growing skills gaps are plaguing [British] businesses and the wider economy. When compared with our G7 counterparts, the UK’s low levels of productivity see us lagging well behind.”
The UK’s longstanding problem with low productivity, lack of investment in skills training, and lack of investment in new technology, dates back many years. Over the last two decades, that problem has been masked by the availability of EU workers under the free movement rules. However, with the end of free movement due to Brexit, employers again face issues arising out of low productivity and the need for more investment in skills training and new technolgy.
Furthermore, the problem has been aggravated further by the large numbers of over 50’s retiring early during the COVID-19 pandemic, which has added to the labour shortages caused by the ending of free movement.
Problem Finally Being Addressed
Nevertheless, as we also highlighted in our recent article, British firms are now finally looking to address the problem of low productivity, in part because they have had no alternative on account of the issue with labour shortages. The annual Employment Trends Survey published by the CBI / Pertemps Network Group, for instance, found that 69% of employers are investing in upgrading the skills of their existing employees, whilst 60% are investing in new technology/automation to boost productivity and reduce labour dependency.
Multifaceted Problem
Low productivity is a multifaceted problem with deep-rooted causes that extend beyond the HR department. It is influenced by various factors such as outdated infrastructure, lack of investment in technology, inadequate training programs, and ineffective management practices. These issues are the responsibility of the boardroom, not HR
It is more productive to recognize the need for a holistic approach to address productivity challenges. This involves collaboration among different stakeholders, including HR, senior leadership, employees, and government bodies. By working together, these parties can identify and tackle the underlying issues that hinder productivity in the UK.
To effectively address the problem of low productivity, organisations should concentrate on developing a working environment conducive to fostering employee engagement, continuous learning, and innovation. HR has a pivotal role to play in this in terms of implementing initiatives such as flexible work arrangements, performance management systems, and upskilling programs.
Rather than making HR the scapegoat, it is essential to view them as partners in driving productivity improvements. By taking a comprehensive approach and addressing all contributing factors, the UK can overcome its productivity challenges and create a more prosperous and competitive economy.
Flexible Working Requests: Most Employees Unaware Of New Rules
A new survey by the Advisory, Conciliation and Arbitration Service (Acas) has found that 70% of employees are not aware of the change in the rules relating to flexible working requests, including the fact that it is now a day one right (as opposed to one that is only acquired by employees after 26 weeks of continuous service with their current employer).
Commenting upon the findings, the chief executive of Acas, Susan Clews, stated: "There has been a substantial shift in flexible working globally, which has allowed more people to better balance their working lives and employers have also benefited from being an attractive place to work. It is important for bosses and staff to be prepared for new changes to the law around the right to request flexible working, which will be coming into force next year."
