The UK economy ranks as 16th most productive, according to OECD data. At the same time, our economy reportedly gains £120 billion per year when employees ‘slack off’. So what’s behind this productivity paradox?

New research reveals that British workers are less efficient on the job than the rest of Europe, echoing latest ONS figures in UK labour productivity.

Understandably, businesses are under increasing pressure to boost workforce performance, especially against the current Brexit backdrop.

Productivity levels are determined as GDP per capita divided by the number of hours worked in a five-day week. The UK ranked in 16th position, faltering behind many EU nations, including Ireland, Germany, France and Sweden. Based on an average workweek of 32 hours, Brits produce £120.21 per week or £18.64 per hour. 

In comparison, Luxembourg, which has one of the smallest populations, emerged as most productive, with its employees earning more than double that of the average UK worker at £45.71 per hour, up to £288.84 per day per person.

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The report by ExpertMarket investigated levels of productivity in over 35 countries across the world to gauge which nation has the most effective workforce. 

Germany enjoys the shortest working hours per year where the average workweek sits at just over 26 hours. The country firmly maintains its position within the top 10 most productive nations with an output of £25.95 per hour or £684.18 per week proving that working longer hours does not naturally equate to productivity.

“Hopefully this means that the culture of presenteeism will be a thing of the past and we will see a more flexible and balanced approach to work in the future,” Expert Market’s Michael Horrocks said. “Employees are clearly more beneficial to organisations when they are happier, so in this instance what’s good for the individual is also what’s good for business.”

What could be holding back UK workers in their output against working hours? According to business Intelligence specialists Xoomworks, three in four UK adults spend at least 30 minutes per day engaged in activities outside of actual work. Counterintuitively, this ‘slacking off’ has been proven to be beneficial for the economy. 

“The survey results reveal that in the UK, we see a substantial sum of money being spent on non-work activities. Analysed in a vacuum, this could be alarming, but allowing for the increase in productivity that comes with workplace contentment, a great deal more value is created than money spent in salary,’ Nicolas Henry, director of business intelligence at Xoomworks explained.

Employees that spend a substantial amount of time on non-work activities may actually be productive

Xoomworks extrapolated this, concluding that UK companies are essentially receiving, on average, 9 per cent more hours work as a result of allowing approximately 30 minutes of discretionary time.

Factoring in the average UK wage of £15.62 per hour, this represents a 150 per cent return on investment on the £108 billion spent paying staff for non-work activities. This squarely places the net benefit to the UK at approximately £120 billion.

Is this all too hypothetical? Oliver Watson, executive board director of specialist global recruitment company PageGroup, doesn’t think so.

UK productivity has continued to stagnate with an output per hour increase of only 0.5 per cent for Q1 2016, compared with Q4 2015. The UK infamously received the accolade of having the lowest productivity in the G7 in 2015, and these figures show that the trend is set to continue.

Watson feels research into the problem is the best way forward in tackling gaps in awareness. “As businesses, we constantly drive our employees to be more productive, but many are not currently demonstrating how to get there or what the final destination looks like. The result is potentially endless cycles of unproductivity with no clear goals or objectives,” he explained. 

Research commissioned by Watson’s firm revealed that only 55 per cent of surveyed office workers fully understand what productivity actually means. 

Seven in ten workers feel the pressure to boost productivity directly from management

 

The research also revealed the constant strain being placed on office workers by the need to be more productive. Only a third were confident that their working day is always productive, and 78 per cent admitted to wanting to be more productive than they are. 

For seven in ten British workers, the pressure comes straight from their bosses. 

When asked for a breakdown of their typical working day, respondents said that they spend a third of their time on email or work phone calls, and almost the same amount on meeting deadlines and attending meetings.

 

By contrast, only 10 per cent of the day is dedicated to learning new things or brainstorming new ideas, which could be the root of the nation’s productivity puzzle.

 

“While a focus on productivity is understandable, employers should consider how much they prioritise productivity over other areas, like innovation. The majority (65 per cent) of office workers feel that innovation falls lower on a business’s agenda than productivity, which should be of particular concern for businesses whose success depends on innovation and forward thinking,” Watson explained. 

 

Productivity figures may be too simplistic a measure of economic output

 

According to Farida Gibbs, CEO and founder of fast-growth SME Gibbs S3, productivity figures are extremely reductive, and other factors are crucial in determining business success. “Productivity has recently been used to criticise UK businesses, and indirectly their employees, but this is not an accurate consideration to take. It looks simplistically at the total output compared with the overall input,” she said.

Gibbs suggests using other markers to gauge overall businesses performance, from KPIs, customer happiness and overall cash flow to the business. 

“When it comes to individual businesses, this is just not an accurate way to determine how well things are going. Employees may go the extra mile with a customer, which can be crucial to long-term client retention and key to all business success, but this does not necessarily give back an instantaneous increase of output.” 

Arguably, productivity figures aren’t the be-all and end-all for economic success, but they help businesses benchmark output levels on the global stage.