Research Digested: Powering up productivity, the Open University

A snapshot of useful research for L&D and workplace professionals.

Why read this report

Productivity has been lagging in the UK for the past 15 years, ever since the 2008 financial crash. This report by the Open University (OU) explores the productivity puzzle, asks business leaders what is holding productivity back and then asks several expert commentators what can be done to drive productivity back up again.

About this research

The OU surveyed over 500 business leaders for the report. It then analysed its findings and conducted interviews with six experts to get their views and advice.

Standout stats

The introduction begins by taking us back a few years when UK had healthy productivity levels, then it fast forwards to the current day:

  • productivity grew in the UK by 2.3% a year, on average, in the period 1974 to 2008
  • productivity languished at roughly 0.5% growth a year from 2008 to 2020

(National Institute of Economic and Social Research 2022 figures)

  • the US was 23%, France 18% and Germany 10% more productive than the UK in 2022
  • 10% of businesses accounted for 63% of annual growth in UK labour productivity between 2011 and 2019
  • in the second quarter of 2024, UK productivity levels were estimated to be 0.1% lower than the year before

(Office for National Statistics)

Now for the OU’s stats:

  • just over a quarter of organisations (27%) say productivity has fallen in the last five years
  • 75% of decision makers say productivity is a medium or high priority
  • 59% have plans in place to boost productivity

How are employers tracking productivity?

  • 29% do not currently measure their productivity
  • 26% do not have the expertise to measure productivity effectively
  • 41% of SMEs don’t measure productivity and don’t plan to in the future either

What are the barriers to productivity?

  • 41% say skills shortages
  • 24% say a lack of relevant technical skills and outdated systems or tech
  • 20% say mental health and wellbeing challenges

Equality, diversity and inclusion (EDI) and productivity

  • 30% of organisations are embracing EDI to improve productivity (32% in the private sector and 23% in the public sector)

Final word:

What do the expert commentators say business leaders should do to address the productivity puzzle?

  • Make the most of measurement (if employers aren’t measuring productivity, how can they manage it?)
  • Invest in skills (reskilling and upskilling, continuous learning, tech skills, leadership and management, apprenticeships…)
  • Capitalise on technology (adopt new technologies, explore AI and green technologies)
  • Take a flexible approach to work (explore hybrid, flexible working practices, focus on employee wellbeing)
  • Empower hidden talent (eg. focus on EDI, look at recruitment, retention and training)

Report reading time: 20 minutes

Media: PDF or Word

Link: https://business.open.ac.uk/productivity

Read more of our Research Digested research summaries here.