IQ-Magazine-Issue-14

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IQ showcase productivity Productivity a workforce or management problem or a combination of the two? James Pinchbeck, Marketing Partner Streets Chartered Accountants The Bank of England Inflation Report in May included a downgrading in its forecast for productivity, the output for man hours for the UK economy. The UK has perhaps shamefully fallen well behind its peers in terms of productivity. Even prior to the financial crisis, our productivity lagged behind our counterparts, a situation which, rather than improve in more recent times as we experience recovery, has actually deteriorated, with productivity levels now 16% lower than they would have been if the pre-recession trend had continued. Going forward, The Bank of England’s view of our productivity does not look any better; in fact their Inflation Report reveals that the forecast for productivity has been revised downward again. issue 14 | page 16
IQ IQ productivity showcase Why then are we deemed to be less productive and why is this becoming more of a trend? There are a number of reasons, which include the growing number of what might be termed uneconomical, even ‘zombie’ businesses, which survive merely because they service debt or just make enough. Such businesses have come about through a combination of low interest rates, the absence of a sharp up-turn in the economy and the general tendency by the financial institutions not to be overbearing but more supportive towards struggling business. We have seen a growing proportion of lower skilled employers in the workforce, which has had a negative effect on output, and such workers tend to be less productive Since 2008, spending and activity focused around workforce and skills development has been subject to cuts by many businesses. The impact of a significant lack of investment in workforce development over a prolonged period of time is now beginning to show, with lower rates of productivity and economic output. Equally, the general trend has been to reduce and in some cases not to make investment in aspects of production and business process, especially in technology and ICT. The effect is seen in out of date and increasingly slow working practices and reduced productivity. In terms of the workforce, it seems that there are many businesses whose poor recruitment selection and in-house training and development has given rise to a less than effective workforce. This situation has been further compounded by role ambiguity between what employers want from their workers and vice versa. It is also increasingly the case that whilst many businesses face new and changing customer demands, their working practices and business processes have not changed to reflect this. Given relatively long periods of low levels of pay awards or, in some cases, no pay awards, little investment in businesses and a lack of vision for the future, workers are feeling less valued and consequently, are less motivated. Whilst many businesses have looked to reduce operating costs to maintain or Since 2008, spending and activity focused around workforce and skills development has been subject to cuts by many businesses enhance operating margins, many have also experienced creeping increases in overheads, whether this increase lies in the cost of replacing like for like kit and new machinery, or is just simply to meet new rafts of compliance. It could also be said, with generally benign trading conditions, many businesses don’t have the desire, vision or skills to improve their productivity. Equally, such businesses tend to fail to attract the more skilled, more demanding employees who are looking for employment. It is more likely than not that such businesses are prone to lose their more skilled, valuable and productive staff to those businesses that have more drive and flair, and which provide for skills and workforce development. We can see then, that there is no single answer to the UK’s lack of productivity. However, that apart, there must be more that business leaders and managers can do to improve productivity. More Information James Pinchbeck, Streets Chartered Accountants Telephone 0845 880 0320 info@streetsweb.co.uk www.streetsweb.co.uk issue 14 | page 17
Page 1: Issue 14: SEPTEMBER - NOVEMBER 2015
Page 7 and 8: IQ welcome welcome to the FouRteent
Page 9 and 10: IQ business overview the Palace of
Page 11 and 12: IQ campaign As a magazine, we’re
Page 13 and 14: info@cubiqdesign.co.uk | 01638 6664
Page 15: IQ finance The world’s second lar
Page 21: TAKING ON OR RENEWING A COMMERCIAL
Page 24 and 25: IQ economic growth Greater Cambridg
Page 26 and 27: IQ investment AMBASSADORS TO CHAMPI
Page 29 and 30: Five Ways To Reduce Your Energy Bil
Page 31 and 32: IQ business profile out the root ca
Page 33: IQ marketing It may come as a surpr
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Page 46 and 47: Go Behind the Scenes Have a Bespoke
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