George Osborne has come under fire after his plans for improving the UK’s lagging productivity were attacked by MP’s in a report.
His “Productivity Plan” for the UK economy, which was published alongside last July’s Budget, puts the UK’s shortfall in productivity down to factors such as lower investment in equipment by businesses and low public infrastructure spending.
Improving productivity is seen as crucial because greater efficiency can be passed on to consumers in the form of lower prices thereby fuelling demand and improving international competitiveness.
However, a committee of MPs have attacked the “Productivity Plan’ for lacking clear objectives and original ideas. And by putting the UK’s shortfall in productivity down to factors such as lower investment in equipment by businesses, I think that George Osborne is missing the point. Yes, investment is needed, but if you really want to improve productivity then you need to first improve employee engagement. No amount of investment will deliver the results the Government and business want if employees aren’t motivated to go the extra mile.
How employee engagement affects productivity
When employees are engaged they will use discretionary effort: office workers will assist colleagues without being asked, or shop assistants will pick up rubbish even if their manager isn’t watching. By doing so, they are helping their employers improve their business.
Kevin Kruse has created what he calls the Engagement-Profit Chain. It shows how ROI comes from employee engagement:
Engaged Employees leads to…
- Higher service, quality, and productivity, which leads to…
- Higher customer satisfaction, which leads to…
- Increased sales (repeat business and referrals), which leads to…
- Higher levels of profit, which leads to…
- Higher shareholder returns (i.e., stock price)
As Richard Branson says,
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Taking care of your employees
To increase employee productivity you need an effective employee engagement strategy. The workplace is changing, and employees have increasing bargaining power, which means senior management teams need to create organisations that engage employees in its vision, goals and values, and take care of their employees.
Here are five ideas for developing an effective employee engagement strategy:
- Have a company vision and values that excite and inspire employees.
- Give employees opportunities for professional and personal development.
- Help employees find purpose in their work by showing them how their job helps deliver the vision and goals of the company.
- Recognise employees in a meaningful and memorable way.
- Remember an employee engagement strategy isn’t ‘fixed’, continue to monitor your employee engagement and adjust it.