7 July 2015 | Herpreet Grewal
The government must conduct a fundamental review of the UK skills policy and align it much more closely to policies that enable businesses to move into higher-value market segments, says the CIPD's report into productivity.
Productivity: Getting The Best Out Of People, the report by the professional body for HR and people development, explores the factors that help to explain why some businesses have higher productivity than others and finds that there are clear links between productivity and how people are managed at work.
The report states that by carrying out a review of UK skills policy it would help "to identify how best we can equip our workforce for the challenges of an ageing population and rapid technological change".
The report indicates that firms that compete on premium quality typically have greater productivity and the report also recommends that the government must improve the co-ordination of public policy and workplace issues, for example, to increase the uptake of high-performance working practices.
Peter Cheese, chief executive of the CIPD, said: "Productivity starts with people. Our flexible labour market's ability to create jobs has exceeded expectations, but our report shows that increasing headcount is now the most common way that businesses respond to increasing demand.
"This has worked well to date and has boosted employment, but the labour supply is already starting to tighten and productivity has not been improving. We need a shift in focus towards increasing the value generated by the workforce and how work is organised.
"This will require a renewed focus on the way people are managed and developed to deliver 'smarter', more productive working."