Nov 28

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:

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’ rather than go off-shore to low-cost nations

  • The UK sees outsourcing 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

 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 here, albeit not excuses:

  • 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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