IQ-Magazine-Issue-14

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 The effect is seen in out of date and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