Productivity in the UK

ONS statistics in 2018 showed that ‘UK workers are taking the lowest number of sick-days on record’. At the same time the ONS estimated that labour productivity, the amount of output produced per hour worked or per worker, had ‘fallen by 0.4 per cent in the first three months of 2018’.

Up until 2008, productivity had been growing steadily at about 2 per cent per year, however, between 2008 and 2009, the time of the recession, productivity was in a downward trend. During the recession this was understandable due to employment rates falling and a higher proportion of workers taking part-time work. Since 2010, however, productivity in the UK and elsewhere in Europe has flat-lined despite the number of hours worked having risen.

Why is Productivity Not Improving?

While economists have tried to explain this ‘productivity puzzle’, no one has been able to explain it entirely. If employment rates and the number of hours worked have risen, the number of sick days taken by workers has fallen, and workers have access to an increasing amount of technology that is meant to improve efficiency, why is the level of productivity not rising?

While economists tend to focus on levels of investment and the amount of loans banks are offering to new businesses to try to explain this, there is of course an important human piece of this puzzle.

It’s estimated that if the recession hadn’t happened, productivity would be 16% higher, meaning that wages and living standards would also be higher than they are now. If people are working longer hours than they were during the recession yet not seeing an improvement in their living standards or a rise in their wages, it’s understandable that their efficiency would suffer.

It’s also understandable that people who are stressed will be less productive, and numerous studies in 2018 have shown that stress levels are alarmingly high. In one study of 2000 people done by Forth with Life, 85% said they experienced stress regularly and over a third said they felt stressed for at least one full day per week. Women reported feeling stressed on average three more days a month than men. The most common causes were work and money.

Stress not only affects productivity in the short term but has an increasingly negative effect. If stress is experienced over a long period of time it has a serious impact on both physical and mental health. When we feel stressed our body releases a hormone called cortisol. If this happens too often, our body stops being able to respond to stress and we start to feel fatigued. Heart problems, respiratory conditions, and digestive issues are aggravated, and muscles become tense, meaning that you are more likely to injure yourself when you engage in physical activities. Our immune systems are affected making it harder for us to fight off germs. Levels of anxiety and depression also rise.

The HSE estimated that in 2016/2017, 526,000 workers suffered from work-related stress, depression or anxiety and 12.5 million working days were lost. 40% of all work-related ill health cases were caused by stress, depression and anxiety.

The main work-related causes that people attributed their stress, depression or anxiety to were workload pressures, such as tight deadlines and too much responsibility, and insufficient managerial support.

Stress levels also seem to be being impacted by technology, the thing that is said to be improving efficiency. In a 2016 study of 1574 managers by CMI and the Work Psychology Group, 61% said mobile technology made it hard for them to switch off from work, with 54% saying they checked their emails outside work and 21% saying they check them all the time.

The Difference that Wellbeing Strategies Can Make

Studies into the links between wellbeing strategies and productivity have shown that they can make a big difference. In a survey carried out by the CIPD in 2018 of over 1000 HR professionals, over a third reported that the introduction of wellbeing strategies had resulted in a healthier and more inclusive work culture, while just under a third reported it had lowered their sickness absence rates. These figures were all higher in companies that had a standalone wellbeing strategy that supported a wider organisation strategy, where senior managers had wellbeing on their agenda and where line managers were trained in the importance of wellbeing.

An experiment by Bristol University into the effects of companies including exercise in the working day, which asked 200 people to rate their productivity and mood on one day when they had exercised and one that they hadn’t, showed that exercise helped participants to feel more productive, more efficient, calmer and happier. Exercise also helped people to concentrate and problem solve.

Whenever companies have invested in wellbeing the results have been striking. When the London School of Economics analysed data from the Royal Mail who invested £45 million in health and wellbeing they saw that it generated a £225 million return on investment between 2004 and 2007.

NHS Trusts that score highly in terms of health and wellbeing in staff surveys perform better financially, as well in terms of spending on agency staff, patient satisfaction, and show fewer cases of acute infections.

Since the British Heart Foundation created a team to develop and spread a wellbeing strategy that they called ‘Live Well. Work Well’ in 2015 they have seen staff engagement increase from 67% in 2016 to 70% in 2017. Staff absence amongst their retail employees dropped from an average of 7.3 days in 2016 to 5.3 days in 2017 and staff turnover dropped from 23.5% to 22%.

Overall jobs that are described as supported, secure, autonomous, which provide a good income, and allow a good work-life balance have been shown to result in better physical and mental health and less absenteeism.

It’s obvious then that looking after your employees, supporting them and helping them to avoid stress and feel engaged, has an important role to play in improving productivity, as well as improving employee loyalty and overall happiness. In fact, Dame Carol Black, an expert in work and health, argues that psychological wellbeing can produce as much as a 25% increase in productivity in workplaces.

Making Sure Your Wellbeing Strategies Are Effective

Businesses are realising the central role employee wellbeing plays in productivity, with nearly three quarters of company bosses and senior managers now claiming that they have a wellbeing programme in place. These most commonly include flexible working, home working, cycle-to-work schemes, cancer screening, health assessments and manager training.

Despite this, 60% of companies report that their employee wellbeing is moderate to very low, suggesting that the wellbeing strategies companies are implementing may not be right for their business or their employees, or may not be being executed properly.

An effective wellbeing strategy is reliant on a fundamental understanding of the wellness challenges in your workplace, the wants and needs of your employees, and a holistic approach that goes beyond simply offering benefits. It doesn’t necessarily need to be costly, but it does need to be tailored to your organisation.

How Can We Help You?

Amalgamate can help you to make sure that whatever wellbeing strategy you put in place, it is the right one for you.

We start by doing a gap analysis exercise in which we look at what you have in place already and to what extent it’s working. We survey managers and employees to get a comprehensive understanding of the way people at different levels of the organisation view the company’s wellbeing support and to build employee engagement.

We then work with you to set your wellbeing goals and build your bespoke Health and Wellbeing Policy, suggesting strategies that you could employ. This could include anything from health promotion campaigns, company flu vaccinations, DSE assessments and staff training on topics such as stress management, to how to implement remote working and encourage exercise and healthy eating in the workplace.

If you like what you hear and would like to know more about how we can help you, give us a call on +44 (0)141 244 0181 or email