Recent researchsuggests that German SMEs are outpacing those based in the UK at an alarming rate; causing a deficit that means if UK workers could catch up to our German counterparts we’d see an increase of £57 billion go back into the economy each year. Such a figure, however speculative, is certainly not to be ignored, so the question must be asked: what could we learn from SMEs in Germany to boost productivity at home?
What has caused such a gap?
Natwest is the company whose research has brought this productivity gap to the fore; they’ve performed extensive research into how German SMEs are excelling in business. The way these firms treat staff has come out on top of a list of areas in which they’re outperforming other countries, including the UK. German companies apparently place workplace culture and employee welfare at the top of their priorities, with employee benefits packages and rewards for good performance proving to have a substantial positive impact on productivity.
Moreover, it is apparent that not only are UK businesses falling behind our European brethren in revenue but that productivity levels in the UK have dropped in the first quarter of the year by 0.5% - a not insignificant amount.
How could we improve?
It’s important not to see this production gap as a negative, but instead use it as a way to learn how we can improve from a country which has proven time and again to be the most productive in Europe. Though many companies can’t see a way to change, there are certain things we can do to ensure we boost productivity.
Research suggests that the focus of UK economy and government remaining firmly on other tasks - such as sorting out the best deal possible for Brexit - has put pressure on UK business which is taking its toll on productivity levels. Some have speculated that endlessly changing stories about Brexit provide an unwanted distraction for an otherwise productive workforce.
Investing in workplace culture and introducing and prioritising measures which boost morale should be immediately adopted. Investing money in areas of the business, perhaps by securing a loanfrom money experts like GIC capital could also be a massive boon to SMEs throughout the UK.
GIC Capital is a fantastic source of advice on how SMEs can improve production rates. Find out morehere.