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Why business is still laughing as productivity falls

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Why business is still laughing as productivity falls

Post by Chas Peeps on Mon Jan 27, 2014 11:51 pm

Once again, our political ruling elite attempts to take us all for fools. Our politicians cite falling productivity in the UK as yet another challenge that working people need to rise to meet. It doesn’t seem to be enough that the vast majority of people in work are trying to cope with their wages and salaries declining in relation to the cost of living.
 
Why is productivity falling? As ever, it is probably a complex picture but I will try to shed some light on it.
 
Firstly, my own job. Without going into too many specifics, I am a professional doing a front line public sector job. My salary has fallen by 18% against the cost of living since 2010 and staff reductions by voluntary retirement / redundancy have seen our team size fall from around 30 in 2010 to 18 in 2014. I can no longer claim any overtime and my car mileage allowance has been cut to a level where I subsidise the cost of providing a car for use in connection with my employment. If anything, our workload has increased due to the nature of our work and how it is impacted by Council reorganisation. Therefore my job is more stressful, I work longer (unpaid) hours and around 40% of my working time is spent doing someone else’s job because their role is under-resourced. None of this is motivating and if my performance doing my own job was tested against 2010, I wouldn’t mind betting if they found lower productivity because a lot of my time is taken doing other people’s jobs who no longer have jobs.
 
In my last job in the private sector, a team of seven fee earning staff and two support staff was cut to one graduate fee earner and one support staff over a period of 18 months in the depth of the recession. Just how productive could that remaining graduate fee earner be when the fully qualified staff who were mentoring him towards becoming fully qualified had left the organisation?
 
Compared to many I am very fortunate that my salary is reasonable in the current job market.
 
Pity far more those trapped on the minimum wage working either every hour God sent to try to make ends meet or alternatively do not have enough working hours to even get close to subsistence pay. One of these people will no doubt be exhausted and the other paralysed with the fear that wage poverty brings. I suggest that neither of these people is going to be anywhere near as productive as someone with a reasonable work life balance bringing in a living income.
 
The main driver for business in the UK today is to de-skill jobs wherever possible to enable them to employ people at the lowest possible rates or to outsource it overseas. A good example would be that of calling an overseas call centre where the accent / language barrier may make the call twice or three times as long as if that barrier did not exist. By any measure of productivity therefore, that call is two to three times less productive than if there was no accent / language barrier to overcome but I would be willing to bet that the cost of the call centre operator may be one tenth or one twentieth of that of a UK call centre using staff of appropriate accents / language for the region or community served.
 
Another example is HMRC (Inland Revenue). Insiders state that whereas HMRC staff used to deal with virtually all aspects of an individuals tax matters by accessing their file, HMRC staff now work in ‘silos’ only dealing with specific types of enquiry and not being able to access someone’s file for ‘the big picture’. This is all about de-skilling and decreasing wages and salaries but inevitably impacts on productivity when the right hand doesn’t know what the left hand is doing.
 
Now for the most sinister part. Although (particularly) Tory politicians trumpet how unemployment continues to fall and the economy continues to recover (their claims, not mine), they continue to bemoan falling productivity. But why isn’t business going on about this ‘crisis’? Put simply, it’s because they don’t need to worry that productivity has fallen because wage and salary levels have fallen EVEN further. As long as that is the case, businesses’ profits will continue to INCREASE, which no surprise is what we see.
 
Once again, we are witnessing a conspiracy between our political ruling elite and the business sector. It is all humbug, they are laughing all the way to the bank but they can't do without the sound of cracking their own whips.
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Chas Peeps

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Re: Why business is still laughing as productivity falls

Post by boatlady on Tue Jan 28, 2014 8:24 am

Chas
I think you are so right in your analysis.
I've felt for some years that the workforce is being deskilled - no-one it seems knows a whole job - everyone knows only one little facet of the job - consequently, no-one really cares whether the job is done well or whether productivity is increased.
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Re: Why business is still laughing as productivity falls

Post by oftenwrong on Tue Jan 28, 2014 12:12 pm

This is not a particularly novel situation, the American-inspired "downsizing" was introduced into the UK more than forty years ago with the notorious McKinsey organisation's audit of business activity.

As the principal cost to most businesses arises from staff salaries, a child could recognise where to "save money".   Accordingly British companies now have two people doing the tasks previously assigned to five, with automated (and profitable) customer-enquiries phone systems allied to a computer-generated response. No-one has ever claimed that computers possess intelligence.

The aim is apparently to have a business run by one man and a dog.  (The man being there mainly to feed the dog).
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