The UK’s Productivity Gap: missing something obvious?15-May-2015
Here are three key facts that might help Mr Carney:1. Companies which systematically involve their employees in decision-making and empower them in their day-to-day work achieve higher levels of productivity
- A review of some sixty US articles shows that workplace innovation has a substantial effect on efficiency, with performance premiums ranging between 15 and 30 percent3.
- Extensive Swedish surveys found a very clear link between participative ways of working and productivity, with improvements of between 20 - 60%4.
- A Dutch study in 2009 showed that smaller firms with participative working practices increased their rate of productivity at nearly three time the rate of those without.
- Bringing the evidence up to date, the 2013 European Company Survey5 of 30,000 establishments demonstrates a clear relationship between employee involvement and participation on the one hand and better business outcomes and workforce health on the other.
2. Even though evidence about the effectiveness of employee empowerment has been around for a long time, successive surveys show that the vast majority of UK companies are not making systematic use of empowering workplace practices. One recent survey6 estimates that less than 10% of employees work in self-managing teams, a basic building block of good work organisation. Less than 30% have a say in how their work is organised. In short, employers aren’t enabling their employees to use and develop their full range of knowledge, experience and creativity in the workplace. The UK compares unfavourably with several other Northern European countries against many indicators of employee involvement and participation.
3. Unlike France, Germany, the Nordic countries and elsewhere, the UK government has no policies or programmes designed to close the gap in productivity caused by the very long tail of companies who are not responding to the evidence.
Does that help Mr Carney to answer the question? Imagine the impact on UK productivity and the economy as a whole if that gap was closed.
Professor Peter Totterdill, Chief Executive, UK WON ([email protected])
 Appelbaum, E., Bailey, T., Berg, P., Kalleberg, A.L. (2000), Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca, NY: ILR Press.
 ITPS (2001), Enterprises in transition: Learning strategies for increased competitiveness, ITPS: Östersund.
NUTEK (1996) Towards Flexible Organisations. Stockholm: NUTEK.
 2013 European Company Survey
 LLAKES (2012) Skills and Employment Survey. Reports downloadable from: www.llakes.org