The latest international productivity comparisons, due to be published by the Office for National Statistics (ONS) on Thursday, will show that the UK continues to trail in the productivity stakes. After a year in which UK productivity growth fell to zero it is high time the government took a fresh policy approach to boosting workplace productivity says Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development.
The latest international snapshot from the ONS will include experimental data showing that UK output per hour continues to fall well short of what is achieved in France, the United States and Germany.
Gordon Brown seems certain to seize on the new ONS figures to reinforce his latest drive to boost UK productivity, drawing upon the ideas of business leaders and his new adviser, former head of the US Federal Reserve Alan Greenspan.
To coincide with the new figures, the CIPD today publishes a report concluding that UK productivity will continue to disappoint in the absence of a joined up public policy agenda that promotes improved workplace management practice ñ Smart Work ñ across all sectors of the economy.
The CIPD report, ëSmart Work: people, productivity and performanceí, the latest in a regular series of ëPublic Policy Perspectivesí, reviews available evidence to show that inadequate people management is a major factor underlying the gap between the United States, the UK and the EU economies in so-called ëtotal factor productivityí i.e. that not due to differences in the relative stocks of capital, skill levels or R&D across countries but to differences in how well available resources are put to use.
Dr John Philpott, the CIPDís chief economist and author of the new report, highlights shortcomings in current government policy and outlines the key elements of a Smart Work agenda, including:
- Making improved people management and working practices central to the governmentís policy agenda, rather than treating it as subsidiary to what the Treasury and DTI consider the main drivers of productivity growth (investment, innovation, skills, enterprise, and competitive product and labour markets);
- Improved national and international benchmarking of the adoption of people management practices, in particular the degree to which staff are multi-skilled and given discretion and autonomy over their work;
- Active promotion of the value of these practices to employers, focused especially at small and medium sized businesses, couched in the kind of positive performance focused language organisations can relate to and act upon;
- Increased policy emphasis on work-related training and work-based learning, rather than simply the acquisition of formal academic or vocational qualifications;
- A sensible limit on working hours to encourage employers to focus on enabling staff to achieve more in each hour worked, but with sufficient flexibility to allow people to work longer hours at certain times if this suits their needs and preferences;
- Support for two-way involvement and engagement between employers and staff at an individual as well as collective level;
- A minimum standard of external reporting by organisations of their people (or ëhuman capitalí) management practices and the measured impact of these practices.
Dr Philpott says:
ìComing after a year when UK productivity growth plummeted to ground zero the latest international comparisons will be disappointing for a Chancellor who for almost a decade has put considerable policy effort into closing the productivity gap.
ìIt must be extremely frustrating for the Chancellor to see UK productivity growth stall after nine years of policies designed to push on the accelerator. Like all his post-war predecessors Mr Brown has struggled against the reluctance of UK plc to invest enough in capital, skills and technology, despite his time in office being a period of economic stability with low inflation, low interest rates, reasonable rates of return on investment and a generally favourable corporate tax regime.
ìHowever, the underlying problem, mostly overlooked by government policy, is that the vast majority of UK organisations still donít make a good enough fist of managing the productive resources they do have, especially their people. If this fact hadnít dawned upon Gordon Brown in 1997 the penny must surely have dropped by now, not least because his preferred brand of top down, target focused, management of the public services has failed to make the most of the billions of pounds of extra investment he has provided.î
Philpott continues:
ìëWork smarter, not harderí has become a modern management mantra. The trouble is too few UK organisations practice what they preach, while the government struggles to develop a coherent policy approach to improving workplace productivity ñ exemplified by the still born effort at re-branding the Department of Trade and Industry after last yearís General Election which would have given it an overt productivity focus.
ìItís vital that an effective Smart Work strategy is constructed ñ and high time government, in partnership with employers and other relevant stakeholders, made a start.î
New CIPD report says government must adopt smart work policy if UK is to close productivity gap
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