Why talk about productivity?

Productivity is a major issue for government and Philip Hammond devoted his first Budget speech as chancellor in 2017 to addressing it.

Workers are no more productive now than on the eve of the financial crisis in 2008. There is a productivity gap of 15 per cent to 19 per cent between the UK and the other six members of the G7 group of nations, according to the Office for National Statistics (ONS).

This means for every five days a British person is at work, a German worker only has to work four days to produce the same economic output.

This could be costing UK families as much as £9,000 per household every year, calculations by the government showed.

The latest productivity release from the ONS reported labour productivity decreased by 0.4 per cent in the third quarter of 2018.

That brought productivity 1.6 per cent above its peak in the fourth quarter of 2007, prior to the economic downturn.

The reasons for presenteeism are largely cultural, so reducing its impact requires bold leadership and change driven from the senior levels of business

In 11 years, we have grown by less than 2 per cent.

While the UK is going in the right direction, it is significantly lower than the long period of average productivity growth prior to the economic downturn and represents a continuation of the UK's “productivity puzzle”.

What causes low productivity in the UK?

It is fair to say that while organisations have been focused on absence management, the complex subject of presenteeism has yet to be addressed.

Presenteeism needs focus if we are to improve UK productivity.

Canada Life's research on presenteeism from the third quarter of 2018 can shed some light.

Employees are only as likely to take time off work for a stress-related illness as they would for a migraine (20 per cent of respondents), and the same proportion are more likely to come into work when unwell with a mental health problem rather than a physical health one.

Canada Life has been researching presenteeism for the past five years, and has seen little to no improvement in its prevalence.

With staggering costs to employers and the knock-on effect on the wider economy, tackling presenteeism is an obvious piece in the productivity puzzle.

The reasons for presenteeism are largely cultural, so reducing its impact requires bold leadership and change driven from the senior levels of business.