The Productivity Puzzle

Despite recent improvements, productivity remains well below its pre-recession levels. But there are ways in which CEOs can help to address this.

- Nick Martindale

One of the longer lasting legacies of the global economic downturn has been an alarming slump in productivity, which has hit virtually every major economy. Generally speaking, productivity levels – how much work is done per worker – have improved in the past three years but remain below those seen back in 2007.

This is a major concern for both countries and businesses, as it essentially means they’re having to put more resources in to get the same amount or less out. The recent Workforce View survey by ADP UK, which polled 10,000 employees across Europe, found 31 per cent of workers struggled to be productive at work. “Productivity is the key to a firm’s competitiveness, economic growth and thus improvement in society’s wellbeing and living standards,” says Renáta Kosová, Associate Professor of Economics at Imperial College London Business School. “With higher productivity, companies can produce more and/or better quality products for cheaper costs. In turn, that allows them to generate and obtain more resources to innovate, grow and bring new products to the overall economy.”

STAFF ENGAGEMENT

Kosová stresses the need for organisations to ensure their goals and values are aligned with employee behaviour and reward. “Many are suffering from bureaucratic friction and lack of proper incentives,” she says. “Employees feel unappreciated, and there’s high employee turnover.”