Ah, productivity. Technically speaking, the rate of output per unit of input. In other words, how much work is being done by how many people in what amount of time – and how well are they doing it? An abstract and difficult measurement to capture (so we’ll leave that bit to the experts) but one thing’s clear: the UK’s failure to get productivity growing again post-downturn is something of a ‘productivity puzzle’.
‘The good news,’ says Martin Wolf in the Financial Times, ‘is that productivity levels are so low, relative to the UK’s peers, that the potential for improvement is large.’ A novel way of looking at it, quickly balanced out with the bad news: ‘that the UK is falling further behind.’ So, how to solve the puzzle? A natural tendency is to focus on employee engagement, with as few as 32% reporting as engaged at work – after all, engagement goes hand-in-hand with productivity – but at Chemistry, we think about it differently because looking at engagement alone will fall short of delivering a truly effective solution. What companies really need to be looking at is getting the right people into their business in the first place.
There’s no doubt that the key to individual productivity is engagement. The latest stats show that even countries with shorter working days are landing above the UK, proving that it’s not about how long we’re working, but how much we’re getting done while we’re there – how resourceful we are with our time. It’s not being ‘busy’ that makes us productive, but being truly engaged. The case for correlation between productivity and engagement in the workplace, between productivity and a happy, healthy work/life balance, gets ever stronger. Do shorter working days make employees more engaged overall? Would four extra bank holidays in the UK, as proposed by the Labour Party last month as it kicked off its pre-election campaign, contribute to a happier, healthier work/life balance – and could they contribute to an overall upturn in productivity?
At a company level, Chemistry believes the key to productivity is getting more of the ‘right’ people into your business from the start. More people like your best people, with great potential to perform brilliantly in your organisation. But how do you know if someone’s ‘right’ for you? Chemistry’s in-house Science Team bases our customised people assessments on the Self Determination Theory, which states that an employee is predisposed to feel engaged when three basic psychological needs are met: they feel able to work, they feel in control of their work, and they feel connected to the people around them. It’s a scientifically rigorous approach that enables organisations to accurately predict which people will be high-performing, engaged and, therefore, productive employees in their business context – i.e. the right people for their them. It’s an approach that means businesses can consistently bring the right people in at scale and have a truly positive impact on company-wide productivity levels.
It’s worth noting that productivity levels are not stagnant in all UK companies, despite what the figures look like. There are lots of innovative companies leading in their fields and being highly productive, but it’s a majority of unproductive companies bringing our averages down. The Bank of England’s Chief Economist, Andy Haldane, has himself warned of the disparity between a small proportion of highly productive firms per region, at the cutting edge of their industries, and most other firms which are unproductive, bringing averages down and struggling to move forward. Haldane says it’s often the case that less productive firms don’t even realise they’re unproductive and that there’s a strong case for their managers being mentored by managers in more productive firms – a lesson in getting the most from your staff, if you will.
All well and good, but the fact of the matter is: the productivity puzzle could be dealt with earlier in the funnel. If you get the right people into your business from the start, they’ll also be the people most likely to be engaged and, therefore, productive. The people with the best potential to get stuff done, be resourceful with their time and instrumental in growing productivity in the business they’re in. Carrying on with the same-old approach to hiring, which only finds the ‘right’ people around 25% of the time, is fundamentally damaging to productivity and changing that is the key to UK-wide productivity growth. Out with the old, in with…Chemistry.