One of the current buzzwords circulating the economy and UK businesses is the productivity puzzle. It will, no doubt, form part of the chancellor’s Autumn Budget speech next week, and it is an issue that we’ve all become preoccupied with in one form or another.
From the smartest economists to the small business owners with a handful or workers, no one seems to be able to solve the productivity puzzle. Employers have a role to play, but so, of course, do the workforce.
In my column a few weeks ago, I wrote about how we as entrepreneurs could contribute to boosting our business’ productivity, whether it might be through staff perks, processes, new technology, or improving the surroundings that employees work in on a day-to-day basis.
Of course it’s unfair to say that an employer’s decisions alone directly dictate how productive our companies are, and there are other factors that come into play.
In fact, Douglas McWilliams, deputy chairman of the Centre for Economics, discussed how the rise of the “lifestyle economy”, and in particular millennials, could be transforming Britain, and affecting productivity, in his book “The Flat White Economy“.
According to McWilliams, this new kind of phenomenon, seen since 2008, could have cost the UK economy an eye-watering £80bn in lost GDP.
Cultivating future workers
In addition to employee unhappiness, our worrying productivity puzzle can also be blamed on poor investment, zombie companies and bad management. But listening to what Douglas has to say, should we be putting the blame on the millennial members of the UK’s workforce or, in fact, is this a wider cultural problem about how we develop future generations of workers.
The country is currently in a unique position of having generally high employment, which, in some cases, helps suppress wages. Pay packets, in general, have also been impacted by the productivity issue. Had pre-financial crisis trends continued, the UK would be almost 20 per cent more productive now. This would, logically, result in higher wages.
However, a new trend seems to be gaining traction where young workers are placing more emphasis on job content rather than the cash they get for their efforts. For employers, that’s not necessarily a bad thing as it means that more people are enjoying their jobs.
And don’t get me wrong, workplace happiness is very important, which is why I have made the effort to introduce facilities and activities that “add value” to the working lives of my employees.
I am also very aware of how these sort of perks, like an in-house, 24-hour gym and a relaxing roof terrace for example, are important to supporting the mental health of the workforce.
What is concerning, is the attitude that employers have to provide the best possible working environment without getting something back from their employees in the form of hard work and dedication, which will, naturally, lead to the higher productivity for businesses and the economy.
Unfortunately, as McWilliams appears to be alluding to, the employment lifestyle appears to be more important than the work itself for many young employees – who are also ready to jump ship the moment that first sign of a storm appears on the horizon.
Now I don’t want to come across too “old school’”and talk about only previous generations being grafters, because I am constantly impressed with the application of my apprentices and other young workers at Pimlico. But, they are in danger of becoming a dying breed after being infiltrated by the “snowflake” generation.
These kids are less resilient than previous generations and are deemed to be too emotionally vulnerable to cope with challenging situations. And the fact these young people have been given their own label demonstrates this is not an isolated issue, but one that is spreading across the whole country and, indeed, the world.
For me, this goes to the culture of education. We’ve spent so long fighting to get more vocational training into the curriculum so kids have the skills for the workplace, but more needs to be done to give them the right attitude.
Everyone is entitled to a high-quality working environment run by considerate and appreciative employers. However, within the skills set every employee brings to their job has to be a thick skin. Life isn’t always straightforward and we have to show some resilience when things get tough.
Perhaps then we can get the workforce balance of happiness and hard work that will give us the boost in output the economy so desperately needs. Productivity puzzle, solved.
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