With trade barriers in Europe coming down, it has never been more critical for UK business leaders to ensure British companies have high productivity and don’t get overtaken by leaner, meaner firms abroad.
And we should be concerned: our European neighbours already achieve higher productivity rates despite having shorter working weeks and enjoying more holidays.
So where are we going wrong?
Time and time again, problems arise because UK organisations depend heavily on ‘overtime’.
Often where there are traditional working arrangements and low rates of basic pay, the workforce becomes dependent on overtime earnings.
Workers have no incentive to ‘up’ their work rate and the low productivity creates more need for overtime – resulting in staffing problems such as fatigue, stress and high levels of short-term sickness absence.
This makes a company’s labour cost base unpredictable and there are also serious health and safety implications to consider.
Global competition is here to stay and companies now have more pressure than ever to maintain high productivity and a flexible labour supply, in the face of measures such as Working Time Regulations, flexible working, part-time working and paternity/maternity leave.
Companies also want to maintain high standards of corporate social responsibility and ensure work-life balance.
To meet this growing global competition, there needs to be a fundamental shift in culture in businesses that rely on overtime.
These organisations may need to take a fresh approach to how they ‘buy labour’ from employees – with a view to controlling labour costs and improving productivity – breaking from inefficient and often expensive traditional and cultural work practices of the past.
Labour supply needs to be in step with the needs of a business and its objectives – the alternative is to sleep walk into obscurity within the global marketplace.
Ditching inflexible employment contracts and patterns of work in favour of systems that will benefit both company and employee is often more practical than many people think.
The first step is to understand the volume and demand on a business or labour force and design cost-effective mechanisms to respond to peaks and troughs.
Being over-dependent on overtime and agency staff to deal with busy periods can often be unnecessary – an alternative can be to empower and reward the existing workforce to deal with working time issues.
This is not just ‘pie in the sky’ – there are many proven techniques which enable organisations to achieve higher productivity in this way.
For example, annualised hours contracts, (which state the number of hours to be worked over a year rather than per week), can bring huge benefits running alongside demand-led rosters with some or all holidays factored in to the roster. This allows organisations to distribute the workforce supply to match the demands of the business throughout the year. This also eliminates or reduces over-time costs and staff under-utilisation.
However, there are signs that some UK companies are starting to take these issues seriously, and there is gathering momentum from those wishing to share good practice from companies at the forefront of change.
But until we start thinking differently about scheduling labour hours and how we buy labour from employees, we will not be able to compete successfully in the global economy.
Jim Whittam is a consultant in labour planning and Working Time Regulations at www.workingtime-solutions.com