Employers need new approaches to boosting productivity

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Employers and policy makers should consider new approaches to addressing low pay, the gender pay gap and rewards, which would help increase productivity across the UK. According to the Institute of Employment Studies (IES) the financial crash in 2008 prompted employers to make use of low-cost reward models, which has resulted in slowed pay progression, limited benefits and uncertain working hours. It claimed that these factors contributed to weakened productivity across the UK in comparison to countries such as France and Germany, as employee engagement diminished. Its report, Fairness, flexibility and affordability, noted that pay growth had been capped at an average of 1% for almost a decade, but the majority of working people saw negative growth in real earnings as inflation averaged at 0.5% above salary progression. The IES said the Government and employers needed to “know their directions, values and culture”, “understand their people [and their] needs and desires” and “recognise the importance of pay and reward” and its link to employee engagement in order to reverse the productivity decline. Rather than creating a universal “best practice HR and reward technique”, the IES said employers needed to research what drives engagement among their own employees and consider giving staff the choice to tailor their