over 2 years ago by Megan Fenner - Jamieson

Britain is Working More Hours, But Are We Adding More Value?

Adding Value blog

Economic update May 2018: High employment and rising wages, but the productivity gap is still a problem. 

Great news! Unemployment has fallen to its lowest figure since records began in the 1970s.

There are now 32.3 million people working in the UK. That’s almost 77% of those of working age, and there’s more good news in the figures this week showing that for the first time in a long time, wages have increased more than inflation.

Since the 2008 financial crash, there’s been a ten-year wage squeeze, with prices rising faster than pay. “Britain needs a pay
rise” say campaigners, and these new figures might suggest it’s coming soon.

But bosses, represented by Matthew Percival of the Confederation of British Industry’s, raised concerns about the productivity gap.

“It’s good to see rising wages alongside strong jobs growth. The challenge now is to embed wage increases through sustained productivity growth, helping to improve living standards right across the UK.”

The productivity gap is a problem that’s puzzled economists, business leaders and government for many years now. It seems that Britain is working more without earning more. This is a problem for employers who are spending more on pay, but not seeing more revenue as a result. 

The Office for National Statistics says “Historically, productivity has trended upwards over time: more goods and services have been produced per hour worked.”

But this hasn’t been the case in Britain for ten years now, and no one’s sure exactly why.

The CBI has called for a partnership to boost productivity“Working in partnership to deliver the industrial strategy, businesses and government can enhance productivity by improving routes to new skills and jobs.” 

The Financial Times warns that productivity remains a big issue for the economy.

“Declining productivity should be “a wake-up call” for the UK, business leaders warned after new data showed it dropped sharply during the first three months of 2018. Productivity growth has been the missing piece of the UK recovery since the 2008 financial crisis and is thought to be the best guarantor of long-term improvements in living standards.”

At CMD we work hard to bring the best candidates to our clients, and we invest in tools and training to improve our productivity and service quality.

We help businesses find the best people in a competitive 
marketplace, in-spite of economic and national trends.

Get in touch with our friendly team to find 
out more about how we #makeithappen.