Britain has undergone a jobs revolution since 2010. On average, 1,000 jobs have been created every single day, and at the time of writing, only six have been taken by George Osborne. Despite this, Britain’s productivity growth has struggled to keep pace and remains well below its long term trend prior to the 2008 financial crisis. This has been a key factor in the squeeze on living standards.
There is much that the government has done. The National Living Wage has increased by 35%. The personal allowance – the amount of money you can earn before paying tax – has increased by a staggering 93%. To address the cost of living, fuel duty has been frozen for eight years – with a ninth year freeze announced in the recent budget – and free childcare has been doubled to 30 hours per week for many parents.
It is often argued that it is Government’s responsibility, and its responsibility alone, to address our productivity problems. But business has a key role to play too. To misquote John F Kennedy: “Ask not what government can do for productivity, ask what your business can do for its productivity.”
As Phillip Hammond said recently, improving productivity is the “single most urgent challenge facing the UK economy”. Low productivity growth is holding back the long-term prosperity of our country. But it doesn’t have to be that way. So here are three suggestions for what business can do if they are serious about transforming productivity both for their individual employees and the company as a whole.
Employee ownership schemes are nothing new. The John Lewis Partnership has been proudly held up as a great example of this for decades. It is, however, the exception not the norm. Employee ownership schemes are more commonly reserved for the most senior executives, inaccessible to the everyday employee.
Businesses should embrace employee ownership on a far broader basis. There are benefits to be had for both employees and employers. A recent study found that employees who work for companies with Employee Stock Ownership Schemes (ESOPs) have a 92% higher median household wealth, 33% higher income from wages, and 53% longer median job tenure than those who did not.