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How can we improve the UK's productivity and happiness index?

Written by Mark Price on Friday, 26 April 2019. Posted in Global

Happiness and productivity are directly proportional to each other. So how can we escalate the UK’s global ranking?

How can we improve the UK's productivity and happiness index?

Happiness and wellbeing at work have recently become central to many businesses in the UK.  With an increase in chief happiness officers, businesses seem to be waking up to having a duty to care for employees’ physical and mental wellbeing. This is of course a huge step forward in employee rights but we must also view this as a huge advancement for the country’s productivity.

There is an unequivocal link between happiness at work and increased productivity. Modern academic research shows that sales, profits and dividends are higher in companies with the most engaged workforces and engaged workforces tend to be happier. Indeed, during my time in the John Lewis Partnership I saw how important an engaged and happy workforce is to the bottom line. I’ve recently created a digital platform designed to make people a little happier at work. Engaging Works is a place where people can assess their workplace happiness with a free survey and employees can survey their own workforce and have access to tools to get them more engaged, happier and hopefully more productive.  

The UK has had a prolonged productivity crisis. The nation is missing out on £130bn in output every year, which firms could unlock if they do more to address poor productivity. Indeed, UK worker productivity is falling and continues to lag behind rates achieved before the financial crisis in 2008. Charlie Bean, of the OBR, as well as the OECD think tank has suggested that the productivity crisis is a far greater problem than Brexit for the UK.

Arguably, looking at Brexit it’s even more necessary to put productivity at the focus of government. In a post-Brexit free market, open trading world, improving our productivity through having a more engaged and happier workforce will become even more vital if we’re to become globally competitive.

So who can the UK follow when it comes to happiness and productivity? Seeing as happiness and productivity are so inextricably linked we can analyse the Engaging Works’ Global Happiness Index for clues. Engaging Works has surveyed over 10,000 employees globally with the workplace happiness survey and here we can see the UK’s workplace happiness rating comes in tenth. Austria, The Netherlands, United States and Germany are all above the UK in rating workplace happiness. The UK’s average happiness score of 6.43 lags behind Austria’s 7.67. What is perhaps most striking is that eight of the countries which sit ahead of the UK also sit above the UK for productivity. But what can UK businesses and entrepreneurs take away from these countries to improve employee productivity?

Look at Germany which came fourth in the happiness survey. UK workers are 27% less productive than German counterparts. So what is making German workers happier and more productive?  

We must look at skills and how this impacts happiness and productivity.  Education and training in Germany has an emphasis on vocational training and a wide range of apprenticeships are available, particularly in the engineering sector. With such a focus on developing young people in the workplace this can only have a positive impact on their workplace happiness.

German working hours are much shorter but also tremendously stricter. On average British workers work an extra 303 hours a year compared to workers in Germany. Based on an eight-hour working day, that’s around 38 days extra. The German government takes the importance of home life seriously and has considered banning bosses from contacting employees outside of working hours. Parental leave is also one of the most generous in the world.  

If we look to the Dutch they also have an interesting take on leave.  They typically have ‘‘Vakantiegeld” or vacation money – a bonus delivered once a year in the summer, not in the winter when this is typically given over the festive period in the UK. Could this bonus ensure more workers take time away on holiday rather than spending their bonus on Christmas presents? The Dutch also typically have a four-day working week which undoubtedly boosts a worker’s happiness and productivity.

Lastly we must look at how infrastructure affects happiness and productivity. Compared to other countries in Europe where productivity is generally higher, Britain’s underinvestment in transport infrastructure is painfully apparent. Employees will be happier if they have an easy commute and unfortunately it’s all too obvious how regularly infrastructure lets down the UK.

So as the country maps out its life without the EU, chief happiness officers could look to Europe for some advice on how to make employees happier and more productive. And maybe the UK will finally start to address its productivity problems.

About the Author

Mark Price

Mark Price

Lord Mark Price is the former managing director of Waitrose and formerly minister for trade and investment.

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