Our productivity sucks

In the 15 years from the start of the global recession in Q3 2008 to Q3 2023, UK productivity growth was 8.08%, according to ONS data.  This is equivalent to 0.54% per annum.  Conversely, in the fifteen-year period between Q2 1993 and Q2 2008, productivity growth was 34.58% or 2.31% per annum.

If we look back even further and look at the 25 years before the 2008 recession, encompassing two earlier recessions in 1984 and the early 1990s, the annual figure is 2.51%.

So what has happened since 2008?  And why does our productivity growth remain stubbornly low?

It is a question that has flummoxed many experts over the last decade, and we have yet to see an upturn in the numbers. Our productivity growth over the last two years has been just 0.01% per annum.

There are many underlying reasons why productivity growth has stalled. However, the result is that many of us are working harder for less money than we were fifteen years ago, and if unchecked, we might be looking at the first generation of children whose standard of living is not better than their parents.

In my view, one of the challenges is that productivity is such a nebulous concept, largely misunderstood by most; it’s a bit like the climate change crisis.  Everyone is aware it exists, and most people fail to see what they can do in their own lives that will make a dent in the scale of the problem.

A good starting point is to understand how we measure productivity and what your organisation’s productivity is now and has been in the past. Without measuring things, it’s almost impossible to manage them.

If you’re interested in understanding the productivity of your organisation and what this tells you about your productivity culture, you’ll need some key information from your financial accounts.  You can get a full calculation, together with some insight into what your number tells you here.