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Employee productivity flatlined in first quarter of 2024

Employee productivity flatlined in first quarter of 2024
Matt Browning
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Matt Browning

Employee productivity in the UK flatlined in the first quarter of 2024 compared to a year ago, research reveals.

It means the average worker produced £149 more than a year ago, but this was possibly due to employees putting in an extra shift to do so.

This contributed to output increasing by 0.1% per hour and a flatlining of productivity in the UK.

On average, employees worked just shy of three hours (2.9) more than they needed to, according to the Centre for Economics and Business Research (CEBR).

The worst performing sector for productivity was business services, which saw a 6.5% decline in output per hour during the last three months of 2023. However, manufacturing workers increased their productivity by 4% in the same time frame.

Is working from home to blame?

Potential explanations for that difference could be the intangible work some business services do that does not immediately appear, which in manufacturing is less common.

The think tank’s report noted that this unit of measurement, while less widely followed than GDP, is “the most important metric in the long term”.

It says this is because, over the long term, this metric is the key indicator for what living standards are like – if you produce more, the knock-on effects lead to an increase in earnings and therefore expenditure into the economy too.

One of the reasons speculated on for the breaking-even of productivity is the impact of changing working patterns, with the average time spent in the office in 2023 being 1.8 days. This is a drop of a couple of days based on Advanced Workplace Associates’ figures.

However, while working from home has less monitoring, CEBR also acknowledged that there are fewer distractions from colleagues (in most cases) and less time for commuting.

Compared to the rest of Europe, the UK worked around 200 hours less per year in 2023 than the average European country in the Organisation for Economic Co-operation and Development in 2022.

‘Employee productivity problem must be solved’

The CEBR study noted: “Whatever the reason for the recent slowdown in productivity, taking a longer-term view reveals that productivity has largely grown at a consistent pace since 2009. The issue is that this pace is remarkably slow, at around 0.8% a year.

“If the UK is to make real inroads in improving people’s standard of living, the productivity problem must be solved. This should be a top priority for whoever wins the election.”