28 September 2015 | Jamie Harris
Research from the Chartered Institute for Personnel and Development (CIPD) has found that a fifth of organisations are stuck in 'survival mode', preventing them from making the productivity gains needed to be able to implement the National Living Wage without a risk to jobs.
The report, Investing in Productivity, shows a link between an organisation's mindset and its relative productivity.
The CIPD's chief economist Mark Beatson, author of the report, said that 'too many businesses are being held back by an 'ambition ceiling' that is preventing them from making the productivity gains needed to achieve business growth and implement the new National Living Wage without risk of job cuts'.
Those organisations, according to the research, are not investing in people or equipment to boost productivity.
Beatson said: "The recession has cast a long shadow over many British businesses and residual fears about a future downturn have left many organisations with a 'glass half empty' mindset which has held them back from investing, despite improved economic conditions.
"We need these businesses to recognise the current opportunities for growth, innovation and investment, to raise their sights and break through their 'ambition ceiling'. Unless they can do this, it's questionable how many companies will be able to absorb the planned National Living Wage without an adverse impact on employment levels."
CIPD chief executive, Peter Cheese, said: "This is the latest in a series of reports the CIPD has produced over the last 18 months arguing that we need a stronger focus on improving workplace productivity if we are to sustain real wage increases for all.
"The National Living Wage could 'pay its way' if employers increase the productivity of their workers. However, if businesses fail to provide better training and redesign jobs and adopt better systems and equipment, so they add more value per hour, it's likely that the UK's productivity problems will persist and companies will struggle to deliver improved wages without making some job cuts."