Can good work solve the productivity puzzle?
In 2017, I published my government-commissioned review into modern employment. Entitled Good Work, its central idea was that good work for all should be our national ambition. Since then, along with the UK government’s early steps to implement the review set out in the Good Work Plan, there has been a welcome increase in research and the sharing of good practice around the theme of work quality. Increasing the quality of work delivers intrinsic benefits for individual workers; the work we do is important to our wellbeing, our incomes and our identity. But, from an Industrial Strategy perspective, it could also help tackle social and regional inequalities and strengthen our economy, through greater workplace productivity.
Why productivity matters
Boosting productivity has been a crucial driver of wage growth and improvements in living standards. As our economy becomes ever more creative and knowledge-based, boosting productivity will not come largely from investment in capital, important though this is. It will come from investment in people.
What we know about investing in people
Intuitively, we might expect that when we treat people well at work, they will be more productive. It is easy to imagine the converse: that where people are badly paid and badly treated, they are unlikely to put in their best performance and more likely to become unwell and to leave their job.
However, there has been surprisingly little analysis of how the different aspects of a ‘good job’ feed into improved productivity. This is the focus of the RSA and Carnegie UK Trust collection: Can good work solve the productivity puzzle? The collection draws together new research, opinion and analysis from a wide range of figures in the debate about good work and productivity – from business, trade unions, academia, civil society and from across the UK. Among the contributing organisations are McKinsey, the TUC, CBI, Acas, Timewise, Scotland’s Fair Work Convention, IPPR North, Cardiff University, JRF, Be the Business, Investors in People and the Resolution Foundation.
Here are some of the key themes that emerge:
- The first big question is, of course, are good work and productivity linked in the way we might intuitively suspect? The answer it appears is ‘yes’ – but with some unknowns and qualifications.
- The next big question is: if good work and productivity are linked, why are business managers not making more of this link? What needs to happen to share this learning and influence practices in workplaces?
- Looking forward, a third question is: can new technologies help or hinder improvements in good work and productivity?
Below is an at-a-glance summary of the ideas coming through:
Tackling bad work to improve job quality and productivity
Analysis undertaken by the Institute of Employment Research, which shows a correlation between good work and productivity. But one which is not uniform across all the different facets of good work - those are pay and benefits; health safety, and psychosocial wellbeing; job design and nature of work; voice and representation; work-life balance; terms of employment; and social support and cohesion. The implication is that some interventions, focusing on different aspects of good work, may deliver more substantial productivity gains than others. It also appears that the correlation is overall much stronger at the bottom end of the labour market (intriguingly at the highest end the relationship reverses, suggesting that trying to make work ‘perfect’ could distract from overall organisational performance). This reinforces a view that the focus for both good work and productivity initiatives should be on lifting more poor-quality work closer to the average level, at the very least. Thus, the economic imperative of high productivity aligns powerfully with the social justice goal of making work better for those who are currently least well serve by the labour market. Simply put, we should prioritise tackling bad work.
This essay collection has started to build the evidence bridge between the two concepts of ‘good work’ and ‘productivity.’ By putting these ideas together, we can render productivity a more understandable concept – one which can support our aspirations for good work and a good society, while linking good work to the urgent and practical task of moving our economy onto a higher trajectory. It is important that we continue to strengthen this bridge so that the story of economic dynamism can go hand in and with our aspiration for an economy in which, as I put it in my Good Work Review, ‘all work is fair and decent, with realistic scope for development and fulfilment’.
Read the essay collection: Can good work solve the productivity puzzle?