Why better HR support is key to productivity

The Chancellor’s recent budget highlighted the UK’s poor productivity growth.  It is complex because there are many contributing factors such as low investment in capital equipment, cheap labour and poor levels of literacy and numeracy.  Increasingly though management quality is coming under the spotlight.   The chief economist at the Bank of England argued in a speech made in March 2017 that management quality is plausibly the main reason for many of the UK’s low productivity companies.

Against this backdrop the CIPD have developed and piloted its People Skills initiative which provided HR support to more than 400 small firms through local partners.

One of the most significant findings from the research project is that the first step to business improvement for many small businesses is getting the very basics of people management in place – establishing staff terms and conditions, drafting job descriptions and having one or two important staff policies in place. The research suggests that until these people management ‘foundations’ are in place, owner-managers don’t have the capability, interest, or time to invest in value-added activity like training staff.   Moreover, HR interventions, if they are to
be applied appropriately and implemented effectively, require specialist knowledge.

The CIPD research found that while the typical type of support delivered to small and medium-sized enterprises (SME)s through the People Skills Initiative service was fairly transactional, there was evidence that the initiative added significant value to participant organisations.

So whether you are needing to get the transactional basics resolved such as drafting your employment contracts and establishing your disciplinary procedures or you are looking for transformational change such as reforming performance management practices or reconfiguring your reward system, please get in touch for an initial free consultation.