How can business leaders solve the post-pandemic productivity puzzle?

The productivity puzzle is a challenge business owners and policymakers are all trying to address. But what is it? And how can you solve it?

CREDIT: This is an edited version of an article that originally appeared on Forbes

Widespread strike action and low energy consumption offset growth areas such as construction, according to the March 2023 data from the Office for National Statistics (ONS). The Office for Budget Responsibility (OBR) has said the U.K. will avoid recession in 2023. Despite predictions, however, the economy is still expected to shrink overall this year by about 0.2%, which is flatlining, at best.

Productivity growth has remained slow in the U.K. during the past decade, and output per hour has underperformed G7 peers for long periods. This has become known as the productivity puzzle and is a challenge leaders and policymakers are all trying to address. So, what can business owners do to solve this puzzle?

Look to talent as well as tech

Much of the conversation around productivity is focused on technology, systems and processes, and there’s obviously a case for investing in these areas to save time and measure more. But what about the untapped human capital investment you already have in your organisation?

If you want to unlock productivity, create an environment where employees have the mandate to think creatively about solving a problem or completing a task. Consider what potential you haven’t yet tapped into from those who are often closer to the details of how improvements can be made day-to-day. Ask them what could be changed about individuals’ roles or if there are shortcuts and efficiencies, they’ve uncovered in some areas of the business that could be rolled out. Allowing your team to do more of what they are good at and engaging them in the journey can enhance engagement and, in turn, boost productivity.

Systems, AI and tech all have a role in driving optimisation—but so, too, do the people who sit behind all of this. And it’s the role of leaders and managers to find ways to unleash that potential by training, developing and empowering their people to do so.

Work smarter, not harder

The productivity puzzle almost sounds quaint, but it is a stark and potentially fatal issue facing the future health of U.K. plc. At a company level, the instinct can be to increase productivity by adding hours or targets for employees, but this approach is unlikely to lead to a sustainable impact.

Nurturing flexibility and reframing the terms of engagement makes good business sense, but what success looks like will vary from business to business. Focus on uncovering what works best for your workforce and productivity; it shouldn’t just mirror what you’ve seen work elsewhere.