A joint report by the CBI and TUC published last week says productivity of
the UK’s companies is lagging behind other European countries. The UK
Productivity Challenge shows that France and Germany are 20 per cent more
productive. This is a dreadful indictment of UK plc.
Our workforce is poorly trained and managed compared with that of our
competitors. UK firms have worse people management practices, and fail to
implement team working or involve staff. The UK invests too little in technology
and innovation. Many workers lack even basic literacy or numeracy skills. Our
schools are failing, managers are failing and successive governments are
The study calls for an independent audit of working practices to provide
evidence of links between best practice and productivity. But recent research
links strong HR practices to high company performance. How many more times must
the case be made before firms take it seriously?
The Government clearly has a huge role to play, for example, in offering tax
incentives for companies to invest in training and technology, especially in
the SME sector.
John Philpott, the CIPD’s chief economist, supports government proposals for
a joint CBI and TUC working party. This is not a bad idea, but it’s a bit like
rounding up the usual suspects.
As Philpott points out, the solution to our low productivity is to spread
people management practices that encourage staff commitment.
No prizes for guessing who is best qualified to do that: any solution to the
productivity problem must involve the HR profession and its leadership.
By Noel O’Reilly