CIPD viewpoint
Explore the CIPD's collected perspective on the key issues impacting work, including recommendations, supporting evidence and links to resources for policymakers and employers
Explore the CIPD’s point of view on productivity and people management, including actions for Government and recommendations for employers
With the UK lagging behind peer nations France, Germany and the US in productivity, we believe that raising the quality of people management across all sectors has the potential to boost productivity.
Productivity growth is critical if the UK is to benefit from sustainable increases in living standards and pay. However, since the financial crash the UK economy has experienced a productivity slow-down, with productivity lower than peer nations France, Germany and the US. This has been attributed to a range of factors, including measurement error, a slowdown in select industries, problems diffusing new technologies, and a lack of management capability.
The last factor in particular has attracted more interest recently after analysis by the Bank of England’s chief economist Andy Haldane prompted him to conclude that lack of management quality was a plausible explanation for the UK’s long tail of low productivity companies.
The CIPD’s own research found differences in firm-level characteristics and productivity performance around culture, performance management, and training. More recent research by the ONS has showed that management practices (and certain people management practices in particular) are some of the most positively correlated with productivity.
The CIPD’s view is that there is an untapped potential to boost productivity by raising the quality of people management across all sectors, and that the workplace should play a more central role in the government’s industrial strategy and policy priorities. The Government’s flagship policies (as currently outlined in the industrial strategy) have focused on macro-policy levers, such as infrastructure projects and the skills system, and have paid far less attention to micro- or firm-level drivers of productivity.
The CIPD has a key role to play by helping to professionalise HR, equipping HR practitioners with the knowledge and skills they need to help organisations build their people management and development capabilities. There’s also a need to continue to build the business case for investing in people to convince stakeholders - such as investors, CEOs, MDs and finance directors - that growing HR and people management capability is key to improving performance and productivity.
In addition, more needs to be done to support small firms with limited or no HR support to help owner-managers of small businesses improve their people management capability.
We believe the insights gained from a number of HR support pilots we’ve run in different parts of the country (aimed at exploring the best ways to boost small firms’ people management capability) demonstrate how this can be done at scale.
Explore the CIPD's collected perspective on the key issues impacting work, including recommendations, supporting evidence and links to resources for policymakers and employers
Engaging with ministers, other policy makers and our membership to inform our views to influence government