A plan to improve the productivity of UK businesses has been published by the Treasury.
The policy document identifies 2 key areas to stimulating productivity in the UK: long-term investment and a dynamic economy.
Among the measures included in the strategy are:
- the government aims to increase business investment by lowering personal and business taxes, and providing more generous capital allowances
- the strategy looks to increase the skills of the UK workforce by creating 3 million new apprenticeships by 2020, introducing an apprenticeship levy on large firms and supporting the university system
- the government has committed itself to upgrading the country’s transport, energy and digital infrastructure
- according to the document, lower state welfare, reforms to planning permission and more employee benefits are essential to enhance the competitiveness of the UK economy.
Recent data from Office for National Statistics showed that labour productivity measured by output per hour increased 0.3% in Q1 2015 year-on-year, the fastest annual growth since Q1 2012.
However, hourly economic output continues to lag behind pre-recession levels and has not risen above its post-crisis peak in Q3 2011.
John Cridland, director general of the Confederation of British Industry, said the “ambitious” plan would “help our economy move up another gear”.
However, Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, said that the measures “only scratched the surface”:
“We have a high proportion of people in low-skilled and low-paid jobs by international standards and an equally high degree of over-qualification with too many employees unable to use the skills they have because of poor leadership and people management, inadequate work organisation and poor job design.”
5 ways to make your business more productive
While it’s essential that government takes measures to improve the productivity of the economy as a whole, there are several ways business owners can improve the efficiency of their company:
- introducing new technology such as cloud computing, accounting software and high-speed broadband
- making your employees feel valued is crucial to maintaining a happy and productive workforce. Provide regular constructive feedback and introduce incentives
- owners of small businesses don’t have the time or expertise to micromanage every task. Trust your teams and delegate the jobs that you are unable to do
- think about the essential processes involved in running your business. How can these be improved?
- investing in training will advance the skills of your employees and result in a more efficient and capable workforce.