ROUND-UP JUNE 2019
In Depth 16%
Fast facts: UK’s productivity woes
UK lags
behind the
rest of the G7
2%
productivity
growth in the
past decade
£110bn
potential boost to
the economy with
a people focus
Improving people management
could unlock billions, says CBI
As much as £110 billion could be
added to the UK economy if
businesses are able to improve
their people management by just 7%, a
new report by the CBI has claimed.
The report, titled Great Job: Solving
the productivity puzzle through the power of
people, has found that British companies
are aware that effective leadership,
engagement and staff development is
important, and that many organisations
are already doing this well. However, it
adds, unlocking the power of its people
could give the UK a much-needed
productivity boost – and the change
needed is well within reach. The CBI’s
research shows that making even
small improvements can yield sizeable
productivity increases. Businesses that
improve their management practices
from the lowest levels to the UK median
can increase their productivity by 19%.
Over the last decade, labour
productivity growth has been lower
than at any time in the 20th century. UK
productivity currently lags 16% behind
the rest of the G7. The reasons for this
are complex and deep-seated, but one
factor is that UK business has not kept
pace with international peers on people
management. Indeed, the CBI report
found that UK businesses perform at or
below the average for other companies
in the EMEA region on nearly 80% of
good people practice indicators.
“It’s no secret that UK productivity
has been stubbornly flat since the
financial crisis,” said Carolyn Fairbairn,
CBI director-general. “If we want to
breathe new life into the economy, then
investing time, effort and resource in
people is a great opportunity for business.
“Many are already doing this
successfully, but it’s clear that firms
should continue to up the game.”
Great Job highlights the hurdles that
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can hold back a firm’s progress. These
include a lack of awareness of what good
looks like, difficulties in getting all parts of
the business to pull in the same direction,
and leaders underestimating the
importance of their words and actions.
“Leaders can underestimate the value
of establishing good people practices as
a priority across their organisations,”
continued Fairbairn. “Improving
productivity is not about people working
harder or longer. It’s about ingraining the
kind of management practices that raise
performance across the business.”
Nine SMEs named for
Made Smarter pilot
A puppet-maker behind some of TV’s
most iconic characters and a 50-yearold
family-owned manufacturer of
stainless steel containers for nuclear
waste are among the nine SMEs that
stand to benefit from the £20 million
Made Smarter pilot programme.
Based across the North West, the
companies are set to trial advanced
manufacturing methods including
Artificial Intelligence, Industrial Internet
of Things, 3D printing and robotics.
The investment is expected to bring
extensive benefits to all the chosen
companies, ranging from improved
productivity and revenues to increased
export sales, job creation and reduced
environmental impact.
For these nine businesses alone,
the Made Smarter business support
programme could deliver an additional
£5.5 million in gross value added (GVA)
for the North West economy.
The pilot scheme aims to engage
with over 3,000 manufacturing SMEs
in the North West and increase the
region’s GVA by up to £115 million.
Up to 600 North West firms will
also qualify for more in-depth support,
including mentoring from senior
industry figures, a leadership &
management programme specifically
designed to support leaders to
implement digital change and grants
towards the cost of new equipment.
The Made Smarter Commission is
an investment between government
and industry, which includes match
funding opportunities and the provision
of dedicated technical and business
support for SMEs adopting digital
technology, to support advanced
manufacturing techniques and the
Fourth Industrial Revolution.
Co-chaired by Business Secretary
Greg Clark, and Siemens CEO, Juergen
Maier, the Commission includes
representatives from 17 leading UK
manufacturers, technology companies
and business representative bodies.
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