Let’s make 2022 the year of productivity

Chamber chief executive, Kim Conchie

Opinion piece by Kim Conchie, CEO of Cornwall Chamber of Commerce

The hospitality industry in Cornwall during the summer of 2021 was an early indicator of the UK’s labour shortage. Lots of EU nationals had gone home upset by Brexit messaging while Covid travel restrictions induced 30,000 more people per week (compared to an average summer) to visit Cornwall – a perfect storm causing quite a few thundery exchanges at the point of delivery for catering and accommodation.

Now that the shortage has spread to all sectors it can no longer be dressed up as a skills mismatch. It appears to be here for a long time – indeed, there is no demographic, immigration or automation answer in the short term.

Britain’s industry has long been accused of throwing cheap labour at demand-led issues rather than investing in AI and robotics at the same rate as our European competitors. We are now at the point where no more people are available so, the theory which even at GCSE economics you need to have a grasp of – productivity – comes to the fore. In essence the question is, how do fewer people produce more or at least meet current demand?

Manufacturing is the purest form of business. Here it is easier to measure the value of output per person. Historically, this is the sector where innovation has led to automation, adding shifts, paying people more to stay, collaborating technology and techniques to improve productivity. The Industrial Revolution was driven by this, firstly among the tin mines of Cornwall where the steam engine, the man engine, the funicular transport of ore, maritime expertise and thousands of years of international trade experience enabled leadership and prosperity.

What’s the 21st Century equivalent solution in a service economy?

The first important step is for business owners to grasp what productivity means. It measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce the value of output. Calculating that ratio in the micro setting of a café, a law firm, a design agency, a software developer, a school … is the more difficult second step. But one we need to address if we are going to get Britain prospering post – or during the ongoing – pandemic.

Productivity is a major theme of activity for Cornwall Chamber of Commerce this year to help businesses work out how fewer people produce what customers are demanding, which in turn will accelerate economic growth. Business owners need real coaching, but here’s some potted guidelines…

Business questions to consider to improve productivity

  • Are your most expensive assets applied to your highest value outputs?
  • Is everyone trained and motivated to do what the business owner is asking of them?
  • Is knowledge and info shared among colleagues effectively by CRM and communications?
  • Does the business know what your customers really want and value from you?
  • How does your business keep records of expenditure on travel, incidentals and encourage things like car share?
  • Are you aware of cost-saving tech solutions and best practice (usually available from Chamber of Commerce or trade association)?

Employees need coaching too. Being aware of one’s value to an organisation is a really strong quality. It results in job security, happy appraisals, robust wage negotiations, promotion. But more than that, the satisfaction of performing a role well leads to better wellbeing, better relationships and better ability to come up with ideas to increase productivity and command premium prices from customers – a virtuous circle.

Cornwall Chamber will be working with our partners at the Skills Hub, the universities, FE colleges and British Chambers of Commerce (BCC) around the Globe (53 in UK; 76 across the world) through programmes like Employer-led Skills and Business Clusters to help every business in Cornwall & Scilly no matter how small or large) to improve their productivity. We should address this before EU funding dries up, to equip us for a new world. If you think the productivity conundrum doesn’t affect your business, well, politely, you’re wrong. And to confront it head-on will result in measurable outcomes and better sleep!

We will have various events through the year (keep a check on cornwallchamber.co.uk) with expert speakers, different perspectives and something for everyone to benefit from. BCC’s latest Quarterly Economic Survey which is the largest regular business questionnaire in the country identified staff shortage as the biggest issue facing businesses – so I know you are, or will soon feel the pain. Use your Chamber of Commerce to help ease that pain, learn some new stuff and be part of a thriving economy. Oh yeah, and help your bottom line.