Throughout the election campaign there was very little talk about the productivity of UK industry. In contrast, plenty of talk, in some quarters at least, of our impressive rates of growth: both in economic and employment terms.
Then last week Mark Carney – the Bank of England governor – broke cover and told the BBC, “We have been successively disappointed with the productivity performance of the UK,” He went on to say, “This is one of the great costs of the financial crisis. What you have in economies after a financial crisis is a sharp drop in productivity… There is a huge opportunity cost.”
The ONS has stated recently, that the UK has the second worst productivity record of the G7 leading Western industrial nations, trailing them in 2011 by 20 percentage points.
Seemingly then, how to strengthen productivity growth ought to be the most important economic question now facing the Bank, business leaders and workers.
In amongst the myriad of firms that comprise UK industry are some – say Engage for Success – who enjoy levels productivity some 18% higher that the average. These firms represent the top quartile of organisations that have made employee engagement a strategic imperative.
The flip side must be that a notable majority of firms, who have not galvanised themselves around the strategic value of employee engagement, are missing a trick… a rather large one. With relatively little investment – after all, they already have the people! – a productivity increase of some 18% is sitting on the table.
After so many years of cost cutting, just imagine what an increase on this scale could do to any firm’s top line? And in turn, what additional business benefits might be realised? A huge opportunity gain.