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UK productivity gap is closing upOn 14 Oct 2003 in Personnel Today Previous Article Next Article UK companies are closing the productivity gap with their main competitors,according to research published last week. However, the study by Proudfoot Consulting identifies poor management as abarrier to further improvements. UK productivity, measured by the amount of utilised labour time, hasincreased to 60 per cent – up 9 per cent since 2001. This figure is similar to Germany and the US, where productivity levelsremain stable with 63 per cent of labour time fully utilised. The improvement means this country has caught up with France, whereproductivity has risen by 6 per cent to 60 per cent since 2001. Despite these improvements, the report estimates that poor labourproductivity among UK firms in the private sector costs the economy £88bn peryear. Entitled Missing Millions – how companies mismanage their most valuableresource, the study is believed to be the world’s most extensive research ofits type. It is based on more than 10,000 hours of observation of employees atall levels of responsibility going about their daily work, and comprisesanalyses of 1,440 companies in seven countries. The study reveals the UK is still losing 85 of 225 working days each yearper employee, through mismanagement and other inefficiencies. Poor managementis responsible for more than two-thirds of this wasted time. Low morale, ineffective communication and inappropriately qualifiedworkforces were identified by the study as specific problems affecting Britishplc. Nicholas Crafts, professor of economic history at The London School ofEconomics, agrees that poor management is still a significant problem forbusiness in the UK. “Clearly, this year’s Proudfoot study provides encouraging news aboutUK productivity; it is nice to read a report on this issue in which UK firms donot appear to be too far behind their international rivals,” he said. “Nevertheless, there is still great scope for more efficient use oflabour than senior management seems to recognise. “Perhaps this is an issue on which the now fashionable shareholderactivism could usefully focus.” By Ross Wighamwww.proudfootconsulting.com Related posts:No related photos. Comments are closed.