Two things have been bugging me for a while now:
1) No-one appears to be prioritising the link between our deteriorating national productivity and an escalation in the number of problems in the lives of our employees
2) How the state of the economy coincides with the date that many young people joined the workforce for the first time
Can we alter our productivity fortunes?
If you entered the workforce post 2008, you did so in a very different world than even the few years before it.
Similarly, if you entered in 2020, you were joining a working world that was going through rapid, generational changes.
I believe these two pivotal dates had major consequences for societal attitudes towards work, driven largely by those under the age of 40 today.
I believe understanding why these dates are so important might be key to changing our productivity fortunes.
These two pivotal dates had major consequences for societal attitudes towards work
Investing in human capital is essential
Productivity growth has been stagnant in the UK since the 2008 financial crisis, and while it’s the same story all over the world, the UK in particular has sat comfortably at the bottom of the recovery league tables ever since.
While there are many factors that will influence a country’s productivity, one of the main drivers has always been an investment in human capital.
Good employee wellbeing and life satisfaction is linked to a reduction in productivity losses to the economy.
Life satisfaction shares a significant, positive relationship with objective performance ratings too.
Productivity growth has been stagnant in the UK since the 2008 financial crisis
Widening the good work agenda
Workers across various ages, industries and incomes have experienced heightened levels of burnout, stress, fatigue and growing dissatisfaction since the 2008 financial crash.
By 2022, they saw:
- Job security fade
- Financial stress at generational highs
- Average student debt topping out at £45,000
- Mental health worsening year on year
- Pay remaining far below the rate of inflation
- Half of us receiving no recognition for the effort we put in.
- We clearly need a wider and better good work agenda and others agree.
Good employee wellbeing and life satisfaction is linked to a reduction in productivity losses to the economy
New research published by the Resolution Foundation, ‘Low Pay Britain 2030’ examines the progress made on reducing low pay across Britain, as well as low sick pay, unpredictable hours and a lack of flexibility and autonomy in the workplace.
The Foundation notes that these are just parts of a wider pattern of low earners lacking protections or flexibilities that higher earners now accept as normal.
They are calling for a higher wage floor, proper sick pay and more autonomy and certainty at work.
While I agree that the lowest earning employees remain at the sharp end of poor work, I do think tackling low pay, inflexibility and control are just part of what feels like a growing problem of us continuing to design our workplaces based on principles and strategies created prior to 2008.
Workers … have experienced heightened levels of burnout, stress, fatigue and growing dissatisfaction
Living standards not double standards
In a workplace context, I can’t help but feel like our social contract is breaking down.
Employees are doing all the things their parents and grandparents did but aren’t getting the same living standards.
Almost two-thirds of those in full time work are experiencing financial precarity.
I can’t help but feel like our social contract is breaking down
Financial precarity is rife
In 2008, a can of Heinz baked beans cost 40p and at that time, someone on National Minimum Wage (NMW) would have been able to buy upwards of 14 tins for every hour they worked. In 2023 an hours’ work on NMW would buy you just seven tins.
This kind of financial precarity significantly undermines the quality of employee output.
Eight million workers say they are less productive since the cost of living crisis began.
The links between pay and productivity are very strong. But it’s not just about paying people a fair wage, the whole deal an employee gets working for us has to get better.
Employees are doing all the things their parents and grandparents did but aren’t getting the same living standards
We have to prioritise how we can vastly improve the experience of work
The 2008 financial crisis, the 2022 cost of living crisis and the social and economic impact of the pandemic altered the very fabric of society and scarred our employees.
In a workplace context, this is playing out in hundreds of millions of lives by the fact that working full time no longer means owning your own home or being able to retire comfortably.
This is forcing a great rethink about what work is, how we should be compensated and most importantly, who we decide to work for.
It’s not just about paying people a fair wage, the whole deal an employee gets working for us has to get better
Are employers upholding their part of the contract?
What began as a balance of the rewards an employee got when working for you is evolving.
The new Employee Value Proposition (EVP) must now demonstrate the ways an employer will support the lives of its people through this crisis and the next.
I think many organisations have failed in their attempts to redesign ‘the deal’ to uphold our end of the contract, because they’ve done so almost entirely from the view of the employer, not the employee.
The 2008 financial crisis, the 2022 cost of living crisis and the … pandemic altered the very fabric of society and scarred our employees
It’s time to redefine
Since 2008 and again in 2020, employees have been increasingly concerned with the quality of their lives which has led to a general consensus that developing better reward strategies is needed.
We have to redefine the progress and development of our organisations by reaffirming our commitment to our people and fostering good, happy lives for them.
The UK is facing two interrelated socioeconomic challenges: one is the crisis of persistent low productivity growth across the economy; the other is the extremely low levels of mental and physical health across the workforce.
We have to redefine the progress and development of our organisations by reaffirming our commitment to our people
Upholding our end of the contract
To be the best employer in the face of these huge societal changes requires us to look at widening the good work agenda so that it doesn’t just include decent pay and sick pay, but also employee benefits and policies that support our people.
We can’t continue to demand high engagement, loyalty or better performance if we aren’t holding up our end of the contract too.
To be the best employer in the face of these huge societal changes requires us to look at widening the good work agenda
Health-orientated company behaviour
A major study across six countries over nine years found that to have high performing teams, you have to have high employee happiness (or subjective wellbeing).
Happiness and wellbeing are more a cause, than a consequence of, success.
The presence of great, positive employee experience precedes success.
To get higher productivity we have to create better employee experiences.
Health-orientated company behaviour describes the extent to which an employer is aware of and protects their employees’ wellbeing.
We can’t continue to demand high engagement, loyalty or better performance if we aren’t holding up our end of the contract too
Wellbeing is critical
This is critical in a productivity context because health-orientated company behaviour correlates with how healthy their employees actually are.
Which in turn, moderates their high performance.
According to a major study of 158,000 people across 450 employers, those employers who create health orientated behaviours through benefits and wellbeing save an average of 11.5 days of unproductive time per employee a year, compared to a standard workplace.
This equates to employing another five people per hundred already employed.
If more UK employers re-designed their EVP to better support people’s lives, I’m confident we’ll help get Britain productive once again.
If you enjoyed this, read: Tackling the cost of living crisis with workplace wellbeing