SMEs must be the new focus to solve the UK’s productivity problems
The UK has today received a chance to assess progress in tackling the country’s productivity crisis. New government figures from the Office for National Statistics (ONS), detailing output per hour since January, show that with a growth of only 0.5% from the last quarter, productivity is trailing 17% behind an extrapolation based on pre-downturn trends. This latest report indicates that nationwide measures being taken to solve the so-called ‘productivity puzzle’ are failing to make the wholesale improvements that will reset the UK’s productivity levels.
Boosting productivity amongst small and medium-sized enterprises (SMEs) must become a priority, but it requires a bespoke approach to meet the specific needs of these companies. Research from Albion Ventures has shown that 50% of SMEs believe that their productivity will increase. Among these companies, the most influential factor on output is expected to be the level of skills within the organisation.
However, SMEs, which employ 60% of the private sector workforce, face continuing barriers to developing their human resources, and embark on up to 50% less training than larger firms. Skills development can be a resource intensive activity for SMEs, but The Open University’s Trends in Learning Report 2016 highlights how technology is enhancing the effectiveness and efficiency of training for smaller enterprises.
Steve Hill, director of external engagement at The Open University, said:
“Most leaders would easily agree that employees are the biggest asset their company has, with the most potential to transform their business outcomes. Yet it’s often the case that larger businesses are relying on technology to improve their output levels. Instead it’s Britain’s smaller companies who are aware that people will always be key to productivity.
“Despite their recognition of its value, I hear from a lot of smaller firms who express that investing in training can still represent a difficult path. What’s most important moving forward is that these businesses understand how to access the training they need in a form that will contribute to their overall productivity.
“Advancements in educational technologies have transformed the value of training for small businesses. These firms often find the time commitment involved in traditional forms of training simply does not fit with their business set-up. The flexibility of online and mobile learning has already significantly altered the structure of training so that it can fit with different organisational needs.
“Now, the opportunity to apply data analytics to these programmes promises to deliver greater returns on learning and development than ever before.”