Business development · 8 April 2016

Workforce productivity: What seven mistakes could you be making?

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Employee engagement and collaboration could be the key to unlocking greater workforce productivity

British employees work some of the longest hours in Europe, but as the Office for National Statistics (ONS) discovered in February, the UK’s productivity gap is significantly worse than many G7 competitors. What are small firms doing wrong? Writing for Business Advice, Natwest expert Marcelino Castrillo has highlighted seven common mistakes, and what can be done to turn them around.

(1) Lack of proper training

Almost half of UK business managers admit to having not received any form of training during the last 12 months, according to the UK commission for employment and skills (UKCES). Meanwhile, the number of positions left vacant because employers cannot find people with the skills or knowledge to fill them has risen by 130 per cent since 2011.

“Develop the skills of your existing workforce to take advantage of new technology and digitisation,” recommended Douglas McCormick, chief executive of construction firm Swett and a commissioner at UKCES. “This will be critical if the UK is to finally close the productivity gap.”

(2) Not engaging and collaborating

UK workers are somewhere near the bottom of the global scale for employee engagement, according to research firm ORC International.

However, a study by technology firm Oracle has revealed that 65 per cent of employees agree employee engagement creates better collaboration at work, with similarly high percentages saying it is a link between engagement and better business, performance and engagement and customer service.

Clare McCartney, research adviser at the Chartered Institute of Personnel and Development (CIPD), argued that one solution is to give employees more autonomy. “Setting employees free to innovate and play to their strengths also involves an employment relationship based on trust, removing unnecessary and restrictive rules and procedures that get in the way of common sense and agility,” she said.

(3) Inadequate access to technology and support

The most common measures taken by SMEs to boost productivity are implementing better processes (30 per cent), better technology (24 per cent), better training (18 per cent) and more flexible working hours (12 per cent), a survey by venture capital firm Albion Ventures has claimed.

The Federation of Small Businesses (FSB) and the all-party parliamentary small business group has called on the government to push through a series of measures that will help small firms in just these areas.

The measures include:

  • Reducing red tape
  • Ensuring universal access to fast, reliable broadband
  • More spending on infrastructure to connect firms
  • Encouraging more R&D by increasing the Higher Education and Innovation fund to £250m

Small business owners should check whether they are getting the internet speed that they are paying for from their provider. If not, they should consider switching to one of the providers that have signed the new Ofcom Code of Conduct.

(4) Too many distractions

The UK workforce loses one billion working days a year as a result of too much multitasking, a study by recruiter Randstad has warned. Being interrupted by emails, notifications, meetings or other distractions can play havoc with productivity, it argued.

Richard MacKinnon, of the think-tank the Future Work Centre, recommended that employers actively teach employees how to manage their time better. “The habits we develop, the emotional reactions we have to messages and the unwritten organisational etiquette around email combine into a toxic source of stress which could be negatively impacting our productivity and wellbeing,” he explained.

(5) Uninspiring office design

There is a link between employee productivity and workplace design, according to office developer AECOM and national grid, who last year worked together to transform the national grid headquarters in Warwick.

Redesigning the workplace to make it more comfortable and to include more areas for collaborative and cross-team working led to an eight per cent increase in productivity, equating to £20m more profit.

(6) Failing to say “well done”

A report by rewards firm Red Letter Days said that 82 per cent of employees who felt motivated last year also received some form of reward or recognition for a job well done. This compared with 69 per cent who did not feel motivated and did not receive a thank you.

As the report argued “Elements such as a good work/life balance and a thank you for a job well done are more motivational for employees than bettering their career with a promotion and extra annual leave.”

(7) Dismissing stress and overwork

More than half of UK employees say they have suffered from mental health problems while in employment, according to research from Canada Life Group Insurance, while 33 per cent felt their situation was made worse by a negative and dismissive approach from their employer.

Healthcare provider VitalityHealth and consultancy Mercer, who together run the Britain’s Healthiest Company Awards, say firms that make an effort to invest in health and wellbeing initiatives had a 24 per cent lower cost of lost productivity (associated with absenteeism) compared with the worst-performing companies.

“Employers need to focus on each employee as an individual, and concentrate on what the employee can do and on the support he or she needs, rather than just imagining all is well until things reach breaking point,” recommended Mentor’s employment law expert Nick Soret.

Annemarie Morris, chair of the APPSBG, believed that solving the UK’s “productivity puzzle” is “critical to helping employers increase wages and boosting the long-term wealth and prosperity of the nation”.

Small firms can take steps in a variety of areas to tackle productivity and improve employees’ working lives. By working to resolve productivity mistakes in this way, small businesses could also boost competitiveness and overall performance.

The Confederation of British Industry (CBI) is just one of the UK’s business bodies encouraging businesses to perform better by putting innovation at the top of the agenda. Is innovation therefore the answer for the country’s productivity problem?

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ABOUT THE EXPERT

Marcelino Castrillo is MD of business banking at RBS in September 2015.   Prior to to that, Castrillo was MD of SME banking at Santander, where he was responsible for leading the challenge of scaling Santander’s business bank and managed the business through a period of significant change.

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