A fifth of organisations are still stuck in survival mode

Research from CIPD reveals organisations who fail to raise their productivity could struggle with the introduction of the national living wage

A fifth of organisations are still stuck in survival mode

Although the recession is long over, it has cast a long shadow. Research has shown the long-lasting effect it has had on employers’ mindset, with a significant number of business owners still focused on keeping the wolf from the door rather than investing for the future.

According to research from the Chartered Institute of Personnel and Development (CIPD), a fifth of organisations are stuck in survival mode despite the increase in economic growth for the past two years. Businesses are also not making the required investments in equipment, technology and people needed to boost their output, something the CIPD thinks could explain the UK’s poor productivity performance in the recent years. 

The study also found that 29% of employers said they failed to equally prioritise their investments between employees and those of equipment and technology.

Additionally, the report showed that a quarter of businesses have continued with investments in equipment, technology and people and this consequently resulted in great increases in their productivity. Conversely 19% had cut costs during the recession and this lead to more productivity in their workers. Of organisations that have focused on people investments for their business, 16% said to see any changes in their productivity they would need to make increased investments in equipment and technology. A further 13% said they have invested in equipment and technology but not enough in staff to get the full benefits from their other investments.

“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,” said Mark Beatson, chief economist at the CIPD. “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.”

Looks like it’s time for employers to stop holding back on investments. After all, you gotta spend money to make money. 

Jess Mackinnon
Jess Mackinnon

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