The United Kingdom’s ‘productivity gap’ has long been a point of national embarrassment. With the economy so dependent upon complex supply chains, improving productivity in transport, logistics and distribution must be a major target. Investment in up-skilling through logistics apprenticeships and training should be part of corporate and national strategies.
What’s the problem?
Labour productivity has essentially flat-lined since the 2008 crash – indeed Q1/2019 saw the third consecutive quarter of declining productivity. Our productive rate is 22% lower than that of the USA or France, and 25% below Germany. Various explanations or excuses are proffered – an investment hiatus post-crash and/or post Brexit referendum, along with the availability of cheap labour from abroad. It is even suggested that the ‘gap’ is just a statistical problem in measuring the self-employed and the gig economy.
None of this rings true...
To quote researchers Hitchens and Birnie, “Britain has its worst comparative performance in those sectors which tend to be skill and technology intensive. [….the important factors are] the human inputs of labour and management [rather than] the quantity of capital, the level or variability of demand, plant or firm size, industrial structure or degree of foreign ownership. Institutional and cultural factors have produced workers and managers who are not appropriately skilled to achieve the standards of their German or American counterparts in terms of either physical productivity or ‘value’ productivity”.
That was written in 1989. Change there has been: university level education has exploded, the compulsory education age raised, exams have been made more rigorous, and albeit with some teething problems, the Apprenticeship Levy scheme introduced. Against that, the failed Industry Training Board schemes were scrapped, smaller defence forces have meant fewer young people learning transferable skills within the military, and most employers have closed their in-house training schools. But the products of the expanded Higher Education sector haven’t necessarily acquired the skills that industry wants, or can use.
What’s the solution?
Unsurprisingly, businesses don’t acquire productivity-enhancing technologies if they don’t think they can hire the skills necessary to get the most out of the investment.
However, there are positive steps than can be taken to raise productivity. Government is trying hard to boost the uptake of apprenticeships and other vocational qualifications – not least by promoting them as the ‘value for money’ option. A pilot for a National Retraining Scheme, aimed at lower-paid non-graduates whose jobs may be taken over by robots, was announced in July, and the skills shortage even got airtime during the recent Conservative leadership contest. The Apprenticeship Levy scheme itself continues to be modified in line with employers’ needs, and the idea that ‘apprenticeships’ can include degree-level academically based qualifications, not just craft skills, is gradually getting over to parents, teachers and career advisors.
Our conclusion...
There is an expanding range of opportunities for businesses to close their productivity gap by investing in appropriate training, which will in turn enable productive technology-based investment.
However, navigating the system is not straightforward – and nor is identifying which skills and competences are needed, now or in the future, to secure competitive advantage and raise productivity. The Bis Henderson Academy team can support your skills development needs, help develop your training capabilities, and guide the company and the workforce through the Levy processes and the appropriate Apprenticeship Standards.
Contact us now for more information on our Lean and Six Sigma inspired apprenticeships, aimed at improving productivity in the warehouse.
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