4 minute read
Nigel Walsh
THE PRODUCTIVITY GAP
BY NIGEL WALSH, DIRECTOR COMMERCIAL BANKING, ULSTER BANK
Northern Ireland’s job market showed signifi cant signs of improvement in May as the economy reopened. HMRC payroll data for the month of May indicated the highest number of employees since the start of the pandemic in March 2020 and the Quarterly Employment Survey (QES) had its fi rst quarterly increase since December 2010, following four consecutive quarters of decline.
This data is certainly encouraging, and a rebound of any sort is to be welcomed, but positive indicators won’t come as a quick fi x to all of Northern Ireland’s economic challenges. As ever, top of the to-do list for business leaders and other important stakeholders is to try and tackle our longstanding problem of low productivity relative to other regions. While this is a problem facing the UK economy as a whole, it cannot be ignored that the situation in Northern Ireland is signifi cantly worse and undoubtedly contributes to underperformance across the region. We are all familiar with the stats that the average German worker would have produced by around 2pm on Thursday what their UK counterpart completes in a week. But do we know that employees in Northern Ireland would have to work to almost 4pm on Saturday to match this same level of output? Many have tried to identify the potential causes to try and explain why fi rms in Northern Ireland are less productive than those in other parts of the UK, yet attempts to address this imbalance have not been entirely successful. The reality is that the issues are so deep-seated that a quick-fi x solution can only scratch the surface and the macro challenges such as our geographical location, reliance on the public sector, and our economic structure, make fi nding a solution all the more diffi cult. That said, it should not be an excuse to allow the productivity gap to become even wider. Put simply, productivity growth is important to businesses because it means they can meet obligations to workers, shareholders and to the local economy. It’s an issue Ulster Bank has been focusing on for some time and thanks to a successful partnership with NI Chamber, we have been delivering our Boosting Productivity series to business leaders across Northern Ireland to try and help them achieve this. At each session, attendees were given the opportunity to hear from leaders who have successfully transformed their businesses and made them future fi t. By sharing their fi rsthand experiences and learnings, it is hoped these business owners will have inspired other entrepreneurs and shown how advancing productivity can be replicated in smaller companies right across Northern Ireland. From feedback collected post-event, we learned that 96% of attendees gained key learnings that benefi ted their company while almost 70% widened their business network including new contacts, potential suppliers and customers. Often looking inwards, reinvesting in workers and demonstrating a commitment to retraining and upskilling can lead to sizeable productivity gains. It sounds like a simple solution and while it may not immediately improve the future prosperity of the region as a whole, when implemented in enough businesses it will certainly have a positive impact. Of course, there are new challenges emerging all the time for businesses and it is still not clear what permanent impact COVID-19 will have had on working patterns, but while we wait for policymakers to address the underlying causes of low productivity, there are solutions and structures that companies can introduce to manage their own levels of output. With things tentatively opening up again, we hope to deliver some further events on this topic and make additional resources available to businesses who are interested in learning more. Keep an eye on the NI Chamber website for more information or visit www.ulsterbank.com to fi nd out how we can help boost the productivity of your business.
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