Talk: Unlock your employee productivity potential

The UK has a productivity problem and it’s not going away. When The Open University (OU) surveyed more than 500 business leaders for its new report, Powering up productivity, one in four of them said productivity had dropped in their organisation over the past five years.

Chris Hogan, Director of Employer Propositions at the OU, discussed the report findings at the Chartered Institute of Personnel and Development’s recent annual conference exhibition. Speaking on the Employee Engagement Insights stage, he talked about the productivity challenges facing UK organisations today and the potential solutions, with a particular focus on four key areas: skills, employee wellbeing, technology and equality, diversity and inclusion (EDI).

There is a real productivity puzzle in the UK and we’re going in the wrong direction.

Chris Hogan
Director of Employer Propositions at the OU

Key findings from the report

Hogan began his talk by outlining some of the standout statistics in the report, giving an overview of productivity levels in the UK and elsewhere. This included research from the National Institute of Economic and Social Research (2022), showing that productivity levels rose steadily (roughly 2.3% each year) in the UK from 1974 to 2008, when they started flatlining. Since then, the average growth in the UK to 2020 has been around 0.5%.

Not all countries are suffering the same productivity crisis. The 2022 Office for National Statistics research found that the US was 23% more productive than the UK in 2022, France 18% more productive and Germany 10% more productive, with productivity being measured in terms of output and hours worked.

Hiring more people or getting people to work longer hours will not solve the problem. Organisations need to invest in people, skills and technology to improve work and improve productivity.

What we need to focus on is investing in the right skills and knowledge to be able to power the future.

Chris Hogan
Director of Employer Propositions at the OU

Employers know they need to take action to boost productivity – 75% of the business leaders surveyed said improving productivity is a medium to high priority, with 59% saying they already have initiatives in place. However, 29% of organisations do not currently measure productivity, with 26% lacking the expertise to do so and 41% of SMEs saying they do not measure productivity and do not plan to.

The importance of skills

Hogan highlighted skills as a key area. He talked about the value of apprenticeships early on in the talk and then went on to talk about three skills areas that need particular attention: leadership/management, digital skills and specific technical skills, and gave examples of best practice such the City of Wolverhampton Council, which has created new income streams by improving and digitising processes.

Business leaders agree that skills are critically important but lacking – 41% say skills shortages are having a negative impact on productivity, with 24% saying a lack of relevant technical skills and outdated systems or technology are barriers to productivity. A fifth (20%) also said that mental health and wellbeing challenges are also barriers.

Another way employers can improve productivity is by tapping into a broader talent pool and ensuring all employees can reach their full potential in the workplace. Yet, only 30% of organisations are embracing EDI to improve productivity. Hogan said it is important that organisations do not overlook hidden talent.

Hogan finished his talk by asking people to think about their productivity measures, how their organisation is performing, what skills gaps are impeding productivity and how employee wellbeing could be affecting productivity.

Points to reflect on

• Critically think about how your own productivity measures are impacting your productivity.
• What skills gaps are preventing you from achieving better productivity?
• How do your training and skills development plans and priorities contribute to increasing productivity?
• To what extent is wellbeing and the morale of the workforce affecting productivity?
• Look outside your organisation for productivity inspiration and consider if, or how, approaches could be adapted to your context.

Powering up productivity report