UK SMEs waste £57 bn a year

NatWest has unveiled research, conducted by the Cebr (Centre for economic and business research) which reveals UK SMEs (defined as companies with 10 – 259 employees) could add up to £57 billion a year – more than the cost of Brexit – to the UK economy if they were as productive as SMEs in Germany

Apparently, UK SME workers generate a mere £147k worth of output per year, less than half that of their German counterparts (£335k per worker per year) – statistics which have a lot more credibility than the ONS’s  flawed labour productivity data

NatWest go on to report more gloom viz:

  • UK SMEs are uncertain about the actions they need to take to boost business productivity
  • Two fifths don’t even know what productivity means in practice
  • This makes it difficult for them to identify the steps to improve

NatWest’s and Cebr’s finest then recommend UK SMEs take the following measures for the biggest impact on productivity:

  • Invest in workplace culture – team building exercises, mentorship or buddy schemes
  • Offer benefits packages above statutory minima – offer of paid days above the legal minimum, subsidies for meals eaten at work
  • Provide rewards for good performance (financial and non-financial) – commissions, bonuses, other gestures
  • In the UK, only a third follow the first two and only a quarter the last one

We’re told this advice is from ‘someone who has been there, done that and really understood the SME business world’ – yet all could be bracketed under a heading ’employee engagement’ suggesting ‘get that right and all will be hunky-dory’

And one can forget other drivers of productivity levels such as management quality, reduction of waste, increases in efficiency, investment and innovation in new processes and products, competition levels or managed luck – employee motivation matters most of all, apparently

Herewith, one big reason for the UK’s productivity gap problem

Self-appointed back-room experts with power, this time over where big money is spent, bombard managers at all levels with their conclusions and advice about causes and ways to improve productivity – yet the UK productivity gap persists, decade after decade

Is it any wonder why!

 

 

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