Financial and non-financial services need to re-boot to kickstart slowing productivity
ONS labour productivity data from Q4 2019 revealed that productivity, as measured by output per hour, saw a small rise of 0.3% compared with the same quarter a year ago. This rise was caused by gross value added (GVA) growing at 1.1% compared with the same quarter a year ago, while hours worked grew by 0.8%. The 0.3% growth in output per hour was largely caused by a strong performance from construction, while manufacturing made the largest negative contribution to whole-economy productivity growth. Financial services made the second-largest negative contribution of the sector of-0.4% and non-financial services third with growth of -0.2%.
This trend of negative productivity growth is a common one with the financial service sector productivity levels falling 0.1% over the last decade. In light of this, chartered accountants Theta Financial Reporting unveils nationally representative research looking into productivity and appeal of professional services, including financial services. Across over 2000 UK adults, this survey looks into people’s attitudes towards the sector, their own productivity and their working environment.
Key findings
- Over 17.5million Brits – 46% of the nation believes that working in ‘the city’ has a detrimental effect on peoples’ health and would not want their children to pursue a career there
- 8.2 million Brits have actively avoided professional services as a career due to the demands of the industry
- 34% of Londoners have avoided the professional services industry as well as a quarter (24%) of AB workers
- Over a quarter of Brits – 26% or 6.7 million UK workers – don’t feel they received the required training to do their job effectively
- This rises to 28% of AB workers
- Four in 10 Brits (39%) feel less productive at work because of presenteeism
This research shows that professional services, including financial and non-financial services, have a productivity problem, with them being two of the largest contributors to negative growth of productivity in the economy. The research from Theta Financial Reporting demonstrates that British workers are actively avoiding these sectors due to health concerns and the demands of the industry. Coupled with millions of Brits not receiving the correct training to complete their job, this will add to the stumped growth in these sectors which has a severe impact on the entire economy.
With this problem continuing for the last decade, it is clear that something needs to change within the industry. With the current situation of millions of Brits working from home, in-office presenteeism will have diminished, and as over a third of British workers say that this is a cause of them lacking productivity, this new working environment could change the course of UK productivity, particularly in the professional services space.
Chris Biggs, managing director of Theta Financial Reporting, commented on the results of the survey:
“This data shows the fundamental problem that the industry has with productivity, and while individuals may be trying to make small tweaks to how they work to combat this, it is clear that there needs to be a more concerted effort to broach this issue once and for all.
While COVID-19 is having a huge impact on business and productivity at the moment, the UK is also going through a shift with millennials and generation z’s driving change towards a greater work-life balance, more focus on workplace mental health and shining a light on employee efficiency and productivity. This has only been exacerbated by lockdown periods during the Coronavirus crisis.
Professional services, for example, have for too long done things as they have always been done, and have been slow to move with the times, continuing to take part in archaic practices. This is leading to negative growth of productivity and a shrinking talent pool.
This research conducted by Theta Financial Reporting demonstrates that the professional services sectors need to change their practices to combat presenteeism and make the sector more appealing to a new generation of employees, otherwise they could face a major talent issue in the coming years. Once we are through the COVID-19 period of disruption, flexible working options and extended training programmes can help companies become more productive and change the course of UK productivity across the entire economy”
