Latest labour productivity figures point to war for talent

UK productivity lowest in two years

UK labour productivity decreased 0.4 per cent in the third quarter of last year, while annual growth was at its weakest in two years.

Output per hour fell 0.4 per cent compared with the previous quarter and grew just 0.2 per cent on the third quarter of 2017, according to the Office for National Statistics.

Head of productivity at ONS, Katherine Kent, said,

Growth in labour productivity remained very weak in the third quarter, at around a tenth of its historic trend rate. Within this the private sector saw productivity growth, whereas for the public and charitable sectors productivity fell.

ONS said the decrease reflected an increase in the number of hours worked, which outpaced growth over the quarter.

The number of jobs has also increased one per cent since the third quarter of 2017, while hours worked jumped 1.3 per cent over the same period.

Matt Weston, Managing Director, Robert Half UK, commented,

Today’s productivity figures are proof that industry 4.0 and the resulting war for talent, is starting to make its presence felt in the UK. According to the ONS, productivity has been driven by improvements in labour skills since the financial crisis in 2008. However, in recent years, increased digitalisation in the workplace and the need for businesses to adapt has widened the skills gap in the UK.

Business owners face a talent dilemma – they must hire people with the skills they need, but it’s also essential they upskill internally in order to plug any skills gap in-house and offer career progression. Employers who want to get ahead of the curve and boost productivity within their organisation should offer wide-ranging benefits packages, alongside an improved remuneration package, in order to attract and retain the top talent. Investing in training and development schemes, in addition to initiatives such as flexible or remote working are vital tools for employers embroiled in the ongoing war for talent.

However, Zoe Humphries, Senior Workplace Consultant at Steelcase, believes that, instead of productivity, we should be measuring engagement and creativity as these are essential the new “high tech, high touch” digital workplace. Zoe comments,

Productivity may be the age-old measure of output, but is it possible that we’ve become so focused on productivity that we’re stifling the creativity needed to innovate?

We live in an age where innovation is the key driver of progress, as businesses face an ever-shifting business landscape and ‘wicked problems’ involving incomplete, contradictory or changing information. Constant innovation is vital, with studies by the OECD and Nesta showing it accounts for 25 to 50 per cent of labour productivity growth.

But while productivity may be driven by innovation, our own research suggests that too much focus on efficiency and output could be stifling the creativity required for innovation to occur. When asked to name the biggest barriers to creativity, employees named heavy workloads (42 per cent) and organisational process (35 per cent) as the biggest issues they face.

So, instead of focusing on who is getting the most done, organisations would be wise to shift how they measure and achieve success. Nurturing a culture of self-expression, factoring creative time into everyday activities and designing the workspace to facilitate creative thinking, could be the key to a more fulfilled – and more productive – workforce.

Interested in organisational design employee productivity? Join our Optimising Performance through Organisation Design training course, our Employee Engagement Summit 2019,  our Reward strategies to Deliver Business Objectives training course, our Job Design for Good Work and Increased Productivity  training course, and our Future of Work Summit 2019

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