Why is productivity at an all time low?

Written by
Tim Oldman

17 Aug 2016

17 Aug 2016 • by Tim Oldman

Despite the somewhat underwhelming increase of 0.5%, as highlighted in July’s ONS Labour Productivity report, productivity remains at an all time low. Overall output has dropped by a staggering 17% since the financial crisis first reared its ugly head. Considering the recent surge of economic unsettlement, it’s fair to assume that UK productivity will continue to stagnate unless something significant is done.

Toxic workplaces

British businesses have been treading water since 2008 for a multitude of reasons. However, the area we can comment on with absolute authority is the role of the corporate workplace in boosting productivity. Across 108 UK workplaces and 11,812 employees measured in the last 12-months, one in three cannot report that their workplace allows them to work productively. This is having a continued negative impact on employees and creating “toxic workplaces” where efforts are being met with business environments that are simply not supporting people in the role they are employed to undertake.

In 2010, Leesman set out with a singular objective - to examine at a depth and consistency never before attempted, exactly how corporate workplaces support employee and organisational performance. Having collected data on more than 1,290 workplaces in 50 countries, it is clear that employers are clearly failing to recognise the role of the office and how it supports the way people work. In fact, there’s a woeful lack of science being applied to the workplace environment - possibly because the focus remains on those ever-tightening purse strings.

In a bid to save costs on the corporate workplace environment, employers are ramming employees into smaller spaces; apparently unaware of the harmful impact this can have on business performance. It’s important to remember that people are productivity drivers because effort always underpins output. And people simply can’t work productively if they’re elbow-to-elbow with their colleagues. As the costs of delivery continues to increase, and as finance directors continue to sacrifice property and infrastructure to save money, more workplaces pass a tipping point where their workspaces are failing to support the productivity of those they accommodate.

What has always sat at the heart of Leesman is this idea around workplace effectiveness. We’ve asked hundreds of thousands of employees across the globe whether their workspace helps them do their job. For one in two people, it actually gets in the way. And a similar number - 49% - would not feel proud to show a visitor around their office. If your workforce is actively dissatisfied with the offering of the workspace, then they’re not going to be particularly engaged or productive. 

Enhance the workplace

Let’s not be seduced into thinking everyone needs sexy spaces. Employers need to understand what their employees need. They don’t necessarily need slides, foosball tables and beanbags. These aren’t drivers of productivity. They do need a variety of spaces with a range of environments, as well as the freedom and choice to select a suitable work setting for the task at hand. Our research has found that nearly half of employees actively partake in ten or more activities as part of their day-to-day role. However, only 27% of employees are satisfied with the variety in their work environment, which suggests that three quarters are simply ‘making do’ with whatever space they’ve been given for the task in hand. People need more than just a desk to be able to do their jobs. Business leaders need to recognise that the corporate workplace is a tool; and they need to use it.

Low productivity aside, we’re entering a period of unprecedented complexity and uncertainly. Challenges will be coming in thick and fast. At all costs, business leaders should avoid cutting costs when it comes to the set up of a workspace. Slashing budgets from the physical and virtual infrastructure is an epidemic part of the productivity problem. People can’t work effectively if the spaces they’re working in don’t support them properly. A significant chunk of money is spent on payroll; so businesses need to ensure the people employed can actually do their job, otherwise what’s the point?

As an industry, we have to rise to the challenge of saying no to cutting costs and apply some commonsense to the workplace. Our data offers the insight required to do just that. It is possible to bale a rope in a tidy fashion. We just need a tougher spine and a stronger set of shoulders.