How does Germany beat UK at productivity?

Unite, a UK trade union, commissioned a study to establish ‘the most significant reasons for Germany’s high productivity rate’ when compared to the UK

The results were as follows:

Reason 1 – Skills:

  • Germany has a highly skilled workforce, which their government has invested a lot in:
    • More than 80% have received formal vocational training or possess an academic degree
    • Technicians are seen as highly skilled professional workers with a long term future – they’re ‘somebody’
  • The UK has yet to give up-skilling and apprenticeships the money needed to get to where we need to be, not least because, once trained, labour finds it easy to leave to better themselves

 

Reason 2 – Long term investment:

  • German companies invest for the long term – and employees know this
  • In the UK, most decisions are made for short-term interests

 

Reason 3 – Minimal off-shoring:

  • German firms are inclined to keep production ‘in-house, at-home’ rather than go off-shore to low-cost nations
  • The UK sees outsourcing abroad as an important way to improve performance

 

Reason 4 – Close working with Unions and workforces:

  • In Germany, Unions and works councils enjoy regular top-level information and consultation – they’re respected and involved in major decision-making
  • In the UK, they’re kept at arms-length – opinions are not sought or often derided, a lingering hangover from the bad old days of the ‘British Disease’ in the 70s when union leaders, not management, considered they were running most businesses

And it’s not just productivity benefits they enjoy

The study found that German workers also work shorter hours and have longer holidays than the Brits

Cautionary notes:

  • It’s no surprise that trade union Unite publicises these findings – they have a vested interest in the German formula – if adopted by the UK, they would get much more power and influence
  • Who says German workers are so much more productive than the Brits – to date, productivity statistics issued by the ONS and OBR are ‘seriously flawed’ – and only used because there’s no others

 

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