Amid better economic figures, the productivity problem
continues to receive significant media attention. The problem is this; if the
economy is getting better and unemployment is going down, why is productivity
so low compared to other countries that are not doing so well economically.
While it is a fresh problem for the economy as a whole,
productivity levels in the tourism and visitor economy sector have
traditionally been lower than, say, the US and France, and the reasons for this
may help explain what’s happening more broadly.
Productivity is obviously about maximising outputs from
inputs. We’ve seen how technology and
innovation have played a major role in raising productivity levels in
manufacturing and engineering. However, the very nature of the service sector
and the necessary interaction between staff and customer means that
productivity levels are naturally lower. That’s not to say that technology
doesn’t play a role; it obviously does and the rise of online shopping, booking
and reservations have changed the interaction between a business and its
customers, and reduced the number of staff required.
But if we go back to our inputs and, in particular, the most
significant one, which is the workforce, we need staff that are fully skilled
and empowered to respond to customer needs. We also need managers that can get
the most of out of their staff and who can position their businesses to respond
to customer needs.
And here we have the problem. The number of employers that
report that their staff lack the required skills is rising and managers come
out high in this category. Figures currently suggest that there are 408,500 staff
working in the sector that do not have the full range of skills required.[1]
High labour turnover continues to mean that staff are not in post long enough
to develop the skills they need and that not enough operational staff are
progressing to management roles. To top it off, despite the high levels of
training in the sector, a lot of it is focused on initial training to deal with
the constant recruitment that takes place to address labour turnover rather than
at those skills and occupations that have the highest skill gaps.
The continued recruitment of low skilled, transient staff in
the UK tourism and visitor economy sector is very different to that found
across the rest of the EU, where in varying degrees they rely on a stable,
professional workforce.
A significant part of the UK sector is increasingly crying
out for a skilled, professional workforce and over the next decade we are going
to see greater polarisation between this more skilled workforce and the low
skilled, transient one that has grown in size over the past twenty years. However,
despite this development, it will only be when we can get out of the mindset
that a flexible workforce can only be achieved through transient recruitment
that will we see productivity levels significantly increase.
