ENGAGEMENT JULY/AUGUST 2019
IT’S THE LITTLE THINGS
A new CBI report has revealed that small, positive changes to people management
could be more valuable to the British economy than double the net worth of Facebook
Great job: solving the productivity puzzle
through the power of people, the latest
report by the CBI (The Confederation of
British Industry) looks for the fi rst time
at how improving the way fi rms attract,
manage and develop their people can
have a tangible impact on UK productivity.
£110 billion, which is equal to the value
of the UK’s entire construction sector,
double the net worth of Facebook, or
more than it would cost to buy Amazon,
the online retailer.
In fact, this tangible impact could be worth
Below average
The CBI report found that UK businesses
to other companies in the EMEA region
80% of good people practice indicators.
perform at or below the average compared
(Europe, Middle East and Africa) on nearly
UK business has clearly not kept pace with
international peers on people management.
Carolyn Fairbairn, CBI director-general,
says: “It’s no secret that UK productivity has been
stubbornly fl at since the fi nancial crisis. If we
want to breathe new life into the economy, then
investing time, eff ort and resource in people is a
great opportunity for business.
“Many are already doing this successfully, but
it’s clear that fi rms should continue to up the
game. The size of the prize from improving the
management practices could be a massive £110
billion injected into our economy.”
BY AMY BEST
Measuring emotions
Great Job highlights the hurdles
that can hold back a fi rm’s
progress. These include a lack
of awareness of what ‘good’
looks like, consensus in business,
and leaders underestimating
their infl uence.
The report states: “The hard
truth is that UK fi rms tend to
overestimate how well they lead,
engage and develop their people,
often because they do not have
eff ective means to measure and
benchmark their performance.
“Getting diff erent parts
same direction is another
barrier, mainly because
there is no shared view of
the nature of the problem
of the business to pull in the
or what can be done to solve
it. A further stumbling block is
that leaders often underestimate
how important their words
and actions are in making good
practices stick.
“A fi nal complication is that
the challenges fi rms face tends
to be diff erent depending on a
business’ size, which can make it
harder for leaders to know what
actions to take.”
Never overestimate
The opportunities from
overcoming these hurdles are
signifi cant (see box, right).
The report highlights the
scale of the opportunity for
UK fi rms’ performance if
they adopt the habits of the
most eff ective businesses in
people management. Fairbairn
continues: “Many fi rms
understand the value of good
people practices but struggle
to put them into practice every
day. Sometimes there is a
group of senior managers who
think they are managing staff
better than they are. Leaders
can underestimate the value
of establishing good people
practices as a priority right
across their organisations.
“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. Putting
people management targets
on an equal footing with
commercial targets, for
example, is a powerful means
of concentrating minds.
79% 26% 64% 42%
of UK fi rms are performing
below the EMEA median
when comparing
the indicators of good
people practice
of UK managers say
their business has adopted
less than half of the
practices identifi ed
of CEOs think their
business has a high
level of good practice
adoption...
compared to just over
40% of other managers
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