UK productivity rate deflates as unemployment figures remain stable

Productivity Freeway Exit Sign

New figures released today from The Office for National Statistics (ONS) show in a ‘flash’ estimate, the weakening of labour productivity growth to 0.3 per cent in the final quarter of 2016.

Output per hour – the ONS’ main measure of labour productivity – grew by 0.3 per cent in Quarter 4 (Oct to Dec) 2016. This is marginally slower than the 0.4 per cent growth rate experienced in Quarter 3 (July to Sept) 2016.

Statistics also reveal that between July to September 2016 and October to December 2016, the number of people in work increased and the number of unemployed people was little changed.

The productivity statistics underline the fact that the UK’s productivity problem still persists, which is bringing further anxiety to those already concerned with the growth, finance and talent issues surrounding Brexit. With the UK now facing an uncertain future outside the EU, the need to improve productivity becomes ever greater.

Commenting on the figures, Steve Hill, External Engagement Director at The Open University said:

“People are at the heart of productivity and if we want to drive up productivity we need to increase the opportunities for our people to learn new skills at any age.

“Investing in skills training will put the economy in a stronger position to cope with the uncertainty of Brexit.  The widening gap between us and other countries shows how we are lagging behind – and means that many UK workers are expected to work longer hours for lower pay than in Europe.

“We need to recognise that there’s a whole pool of talent out there who don’t have access to the traditional higher education routes, because they are financially disadvantaged or perhaps don’t have qualifications to meet the entry requirements of a typical brick-and-mortar university, for example.  Businesses should look to upskill and reskill this talent – enabling people to earn while they learn through apprenticeships, employer funded qualifications and work-based courses – and reap the benefits of having a more diverse workforce. All of this will have a positive impact on the UK economy.

“With the introduction of the apprenticeship levy and degree and higher-level apprenticeships, there is an exciting new opportunity for businesses to upskill staff and gain much needed higher skills to improve productivity and performance. If UK businesses fail to invest in training, the gap will widen beyond recognition.”

 

 

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  1. We think that the productivity issue is also down to poor employee wellbeing as well. If sickness rates are high, stress leave and other issues are left unaddressed, productivity takes a serious hit. Companies that look after and support their staff with wellbeing initiatives and training create the environment for higher productivity. Our research and client cases prove it.

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