Productivity and skills: Ready, steady – grow! 

Man casually dressed working from home on laptop

Organisations must grow productivity to stay competitive; and people want to learn and grow to stay relevant and well rewarded. Given this symmetry of goals, why is UK productivity a perennial problem?

Data in the most recent report from the Office for National Statistics (ONS) show the UK lagging other G7 nations in both output per hour worked and output per worker. Output per US worker is 50% higher than here in the UK. Equally, French and German labour productivity is materially higher than in the UK. Consider also that millions of working-age citizens have withdrawn from the UK workforce, either temporarily because of health issues or permanently because of lifestyle choices — which has contributed to talent shortage across many sectors. Combined with fears about recession, wage inflation and an increased cost of capital, companies are right to be concerned about their ability to deliver productivity growth and financial performance. Maybe it’s time to rethink how we utilise talent in service of stronger productivity growth. 

Let’s look at a few more statistics. In Mercer’s most recent Global Talent Trends Study, 98% of HR respondents say their organisations lack sufficient skills. Also, 78% of organisations polled by the Edge Foundation say they have suffered a decline in output, growth or profitability because of an inability to recruit suitably qualified employees. For sure, productivity depends on many factors beyond the availability and skill of people. Yet these are foundations for sustained productivity. So when the labour market can’t supply the numbers you need to grow your business, and when your people tell you they want to experience learning as a way to grow themselves, a new possibility emerges — the potential for building a skills-based organisation. 

Paradoxically, even as technology changes the work we do and the COVID-19 pandemic has changed how we work, bringing skills and tasks together has become easier. Matching the two via processes that describe skills and tasks in an AI-driven manner, with transparency about the process, is what talent marketplace solutions now enable. Gloat and Eightfold are examples of such systems. Companies such as Unilever, Standard Chartered and Zurich Insurance, are using these new approaches to improve talent deployment, resulting in reduced turnover, improved productivity and greater employee satisfaction. In essence, these systems allow employees to “bid” on projects or tasks that managers post onto internal notice boards. This allows skills to flow to tasks in a more dynamic manner. 

Clearly, introducing a new system isn’t the only answer to the skills–productivity conundrum. Work is changing, moving towards a more fluid, project- or gig-oriented construct. Although there are plenty of tasks better suited to fixed roles (think airline pilots — hardly a job for a gig occupant!), increasingly, tasks are becoming more “flow” oriented. These are activities in which an individual or group of people with the requisite skills can flow onto defined tasks, complete them and then move on to other projects (software developers being the obvious case, a project task force being another). Analysing which are fixed versus flow tasks and what skills are relevant to accomplish those tasks requires a corresponding rethink of job architecture and reward.

The pandemic accelerated the shift to a more employee-led reskilling process because of remote working patterns. Employee survey data from that period point to an increased desire by employees for greater visibility over development opportunities within their own organisations. 

LinkedIn pushes notification about opportunities to users based on the skills listed in their profiles. The combination of employee-led demand and employer-fed need is facilitated by slicker AI-driven technology, which matches demand and supply. Organisations such as Teva Pharmaceuticals are using talent-marketplace solutions and persona-based workforce analysis to ensure improved workforce utilisation — not just for the benefit of employees but also for line managers, HR and senior leaders in the various business units. Part of a deeper change management approach, Teva’s strategy involves surfacing workforce skills issues ahead of time and confronting internal barriers, such as managers wanting to retain their people locally, to foster a more collaborative approach and ensure talent flows more freely between business units. 

In another case, a leading insurer is actively taking steps to move employees between roles with adjacent skill sets. This flow model is building a stronger bench of scarce and expensive skills in areas such as digital and data analytics to ensure that the organisation can expand its strategic capabilities and productivity while encouraging a mind-set of change-readiness and continuous skills development.  

All these examples point to how organisations are harnessing technology to create a triple win:

  • Strengthening productivity by matching capabilities to required tasks through agile skills deployment
  • Boosting employee confidence and engagement through greater support for individual skills development
  • Helping HR unlock potential even while reducing attrition in a tight labour market

Transforming how your company utilises skills requires vision and a solid business case. Being able to show how the cost of reskilling and redeploying employees compares to the cost of hiring and making others redundant elevates skills-thinking to the board level. Having the data to back up your opinion is critical. From helping organisations implement these solutions, we know this is the quickest route to solving your company’s productivity conundrum. 

If organisational agility and skills development continue to be drivers of growth and engagement, we need fresh thinking about how to operate. Get in touch with us if you’d like to explore how this could work inside your organisation.

About the author(s)
Nick Starritt
Marcus Downing
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