Jo Geraghty


Boosting productivity

Date added: 18th Mar 2015
Category: Employee Engagement

A study in December 2014 from the Centre for Economics and Business Research revealed that flexible working not only improves trust, and therefore engagement, it also is key to boosting productivity.

In a time of rising growth it can be all too easy to allow ourselves to be content with the growth in actual output rather than take additional steps to ensure that we are as productive as we can be.  But unless we do take steps to maximise productivity then we are potentially missing out on a huge potential gain for our own business and for the country.  This productivity/employment mix is certainly one area which has been exercising the minds of those in the Bank of England and other institutions over the past year.  Put simply, measured growth has not kept pace with the rise in employment numbers.  So much so that a report in June 2014 revealed that whilst the level of output has returned to pre-crisis levels, the level of productivity was 16% down on where it would be expected to be if pre-crisis trends were followed.

Amid all of the speeches and papers which sought to come up with some explanation for this ‘productivity puzzle’ one of the most honest came in December 2014 from Martin Weale, External member of the Monetary Policy Committee. The speech explored a number of areas including labour hoarding, capital allocation, investment and educational attainment but concluded that whilst the depth of the financial crisis is still casting a long shadow there is still insufficient evidence to provide a clear explanation of current productivity levels.  In other words, we don’t’ know and we’ll have to wait and see.

At the time, we commented on one significant omission from Martin Weale’s observations; the effect which employee engagement has on productivity.  With engagement levels still being reported as generally low across the globe, it is perhaps unsurprising that productivity is also low.  With engagement comes lower levels of wastage, lower sickness absence, greater longevity of employees and a greater buy-in to the business, all factors which will help to boost engagement.

But perhaps the tide has started to turn. We recently reported on one East Anglian law firm which has followed the lead set by the likes of Virgin and Netflix by experimenting with paid time off (PTO) in place of fixed holidays.  The headline idea behind PTO is that employees take leave to suit their own needs and that of the business.  Interestingly one of the key messages behind PTO is that it turns the business emphasis around from time in office to work done.   With surveys revealing variously that we tend to mentally ‘clock off’ for the weekend around lunch time on Fridays, anything which boosts our concentration on task fulfilment will automatically have a knock-on effect on productivity.

One other key enabler of increased productivity may be the ability of employees to work flexibly from home or from alternate sites.  A study in December 2014 from the Centre for Economics and Business Research revealed that flexible working not only improves trust, and therefore engagement, it also is key to boosting productivity.  One of the report’s conclusions was that a wider adoption of one or two work at home days per week could benefit the UK economy to the tune of £11.5 billion.

With the employer/employee relationship being strengthened through trust, flexibility and engagement alongside a move towards working in response to tasks rather than filling hours it may not be long before the UK productivity puzzle is well on its way to being solved.


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