NatWest’s ‘Productivity in focus: Germany vs. the UK’* report, conducted by Cebr, reveals that UK SMEs could add up to £57 billion a year – more than the cost of Brexit**– to the UK economy if they were as productive as SMEs in Germany***.
In the UK, SME employees generate an average of £147,000 worth of output per year – less than half that of their German counterparts (£335,000 per worker, per year). And according to figures from the Office for National Statistics, this productivity gap is under further pressure, with a 0.5 per cent fall in UK productivity in the first quarter of the year.
Despite the fact that 69 per cent of SMEs feel that improved productivity is key to boosting business performance, decision makers appear unsure of what to do.
To help UK SMEs understand what measures they can take to improve productivity, the research identifies potential changes UK firms can make to close the productivity gap, including:
- Investing in workplace culture.
- Providing benefits packages above statutory minimum.
- Offering rewards for good performance (financial and non-financial).
- Career development programmes and guidance.
- Providing the right equipment or technology (IT/machinery).
Commenting on the findings, Alison Rose, Chief Executive of NatWest Commercial and Private Banking, says: “From talking to thousands of our business customers every year, we know that many small to mid-size businesses struggle to understand how best to improve productivity.
“It’s crucial that banks, Government, and business leaders tackle this problem head-on, and start putting measures to improve productivity into practice.”
Productivity leads to profitability, which in turn leads to business growth. But in order to improve productivity and profitability, business leaders must think and to do things a little differently to stand out from the competition and enhance your bottom line.
Improving productivity is an ongoing activity and a win-win process. For further information about how we can help you and your SME business achieve your goals and ambitions, contact Steve Govey or your usual Beavis Morgan Partner.
* NatWest’s ‘Productivity in focus: Germany vs. the UK’ report. https://www.rbs.com/content/dam/rbs_com/rbs/PDFs/natwest_report_business_blue_print.pdf
** Chief of Government’s spending Watchdog, Sir Amyas Morse of the National Audit Office, sets the Brexit divorce bill at £39 billion. http://uk.businessinsider.com/brexit-uk-required-to-pay-39-billion-divorce-bill-even-without-deal-2018-4
*** With 10-259 workers.