In today’s highly competitive global market, ensuring that your workforce is optimised to be as productive as possible is paramount. Building a world-class, highly productive workforce relies on three key pillars: competent people, optimised processes, and a methodology for continuous improvement.

However, in the UK we continue to face a significant and increasing productivity gap when compared to other developed economies. This limitation in productivity stifles success, with the UK increasingly falling behind its international counterparts.

In this article, we will explore what this productivity gap looks like, how we compare internationally, its causes, and how organisations can address it by cultivating world-class talent and optimising workforce performance.

Understanding the Productivity Challenge

Productivity is a critical indicator of efficiency and performance within any organisation, measurable at all levels of the organisation, from individual employees to whole teams of people. Various metrics are used by organisations such as the UK Office of National Statistics to calculate and measure the level of workforce productivity.

Based on recent figures, the UK workforce shows troubling trends:

  • Post-2008 Productivity Growth: The UK’s productivity growth has averaged only 0.3% per year since 2008, a stark contrast to the 2% growth per year seen before the financial crisis.
  • International Benchmarks: The UK’s productivity levels are 16% lower when compared to the G7 average and 19% lower when compared to the USA.
  • Sectoral Disparities: The UK manufacturing sector has a productivity level 30% lower than the benchmark set by Germany.
  • Underinvestment: The UK’s rate of investment is being outpaced by other European countries such as France and Germany. 

These statistics are just a snapshot of the pressing need for organisations in the UK to have an industrial strategy that comprehensively addresses this productivity gap. It also indicates towards the potential gains available should our productivity and performance were to improve to match that of our European counterparts.

The Roots of the Productivity Gap

What are the contributing factors affecting the productivity of the UK workforce:

  1. Skill Mismatch: Significant portions of the workforce do not have the appropriate level of competence, or have competencies that are being underutilised, leading to lower rates of productivity and engagement. Competent people can also be redeployed into roles where they are less or incompetent, and therefore adversely affecting productivity.
  2. Inadequate Training and Development: Underinvestment, inefficient delivery of training, or non-existence / ineffectual assessment of competence, result in an inadequate training and development process. This manifests itself as poor ROI on training budgets, costly mistakes / wastage, and suboptimal performance.
  3. Ineffective Workforce Utilisation (WfU): Research shows that typical workforce utilisation is around 55%, but has been recorded as low as 24% in some cases, with world-class utilisation at around 85%. This suggests that many organisations are not maximising their human capital, with a lot of potential for improvement.

Strategies for Closing the Gap

Whilst unfortunately there is no silver bullet for solving the productivity problem, a combination of strategic approaches can be taken to begin to drive improvements:

  • Develop and Implement a Competency Framework: A well-defined and fit-for-purpose competency framework is essential. It should align to organisational goals helping you to define required employee skills. This will help to ensure everyone understands what is expected of them and is equipped to meet those expectations.
  • Adopt a Data-Driven Approach: Organisations should utilise data to inform strategic decisions and measure performance. This objective approach can help to identify areas for improvement that deliver the most impact. Progress should be tracked with appropriate and well-defined Key Performance Indicators (KPI).

A dedicated system, such as a Competency Management System (CMS) can play a crucial role in implementing a data-driven approach. Taking the laborious task of tracking employee training, skills and competencies, and making it easy, process driven and centralised. This systematic approach offers the advantage of advanced insights and reporting into the gathered data e.g. skills gap analysis, performance management, compliance tracking.

  • Commit to Continuous Improvement: Processes should be designed with continuous improvement in mind. This will help to encourage a culture of efficiency and performance, in turn leading to sustained productivity gains.
  • Invest in Skills and Training: Organisations should have a focused and well-thought-out investment plan to upskill and reskill their employees. This investment should not focus just on technical skills, but all the skills that make up the competency framework. For example, soft skills such as communication, teamwork, and leadership. Supported by a competency framework and a data driven approach, organisations can ensure investment in L&D will deliver a demonstrable return on investment.

The Path to World-Class Performance

By developing a highly trained and competent workforce, organisations can move towards world-class performance. This shift requires strategic planning, effective investment in people, and a commitment to ongoing development.

Imagine your organisation as a high-performing F1 pit crew—every team member knows their role, communication is seamless, and every action is optimised for efficiency. This level of coordination and skill can significantly enhance performance and drive economic productivity and growth.

Conclusion

Closing the productivity gap is not just about addressing current deficiencies; it’s about building a resilient, motivated, and skilled workforce that can adapt to future challenges. By focusing on developing world-class people, organisations can achieve amazing results, enhance operational resilience, and secure a competitive edge in the global market.

To learn more about this topic, Think Eleven Managing Director, Darren Race, will be delivering the seminar “Developing World Class People: Tackling the Productivity Gap” on Tuesday 8th October, at 11.15am at the World of Learning conference.

Let’s start the conversation on how to maximise your team’s potential and drive productivity forward. Visit us at Stand E190

About the Author

Darren Race is the MD and co-founder of Think Eleven with over 30 years’ experience across a diverse range of sectors, which resulted in the incorporation of Think Eleven Limited in 2006 and the development of SkillStation (Competency Management System). Darren and the team at Think Eleven help organisations develop and implement a transformational and high-impact Competency Framework across all sectors globally.