The report has come just a few days after the Office for National Statistics released data showing how far the UK lags behind other economies when it comes to productivityPoor productivity has been a big problem in the UK in the last few years; now, the economic challenge is getting worse, according to a recent report.
The report, which was released by accountancy and business advisory firm BDO, found that companies are now hiring more staff than in the past; however, the output for the companies has not changed significantly. The report also says that the average amount of work produced each hour in the UK is likely to slow even further, making the problem even worse than it already is.
What is causing this problem? So far, no one is sure, with many economists baffled by the situation. One leading theory is that the problem is caused by the mediocrity of many British firms, which have stayed in business for years with a loose monetary policy that allows both workers and managers to become complacent. In short, the business knows that it will make a turnover, so it does not push its managers and employees to go the extra mile.
One solution could be improved education in schools about technical subjects, productivity and motivation. In recent years, local and national government have made a concentrated effort to improve education in schools, which could help to improve the UK’s productivity problem in the next decade. It could also be beneficial for the government to invest more in the UK’s out of date infrastructure.
The report has come just a few days after the Office for National Statistics released data showing how far the UK lags behind other economies when it comes to productivity. One shocking statistic shows that American and German workers can complete more work in four days than UK workers can complete in five.
This shows the difficulty the UK economy is facing when it comes to boosting productivity. While marginal productivity increases have been announced by the Office for National Statistics – the figures state that productivity has increased by 0.4 per cent in the fourth quarter of 2016 – the increase is very low and leaves the UK lagging behind other economies.
Without a higher productivity rate for hourly work, the British economy will struggle to grow unless employees are willing to work longer hours. More employees could also be hired; however, this could be very difficult, as the UK already has a high employment rate.
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