Is the people factor being lost in the productivity debate?
17 Sep 2025
Dan Lucy, Director, HR Research and Consulting
The UK has a productivity problem. We produce far less per hour worked than our international comparators and, consequently, economic growth and living standards are stifled. The problem and causes are well-known and range from comparatively low investment in capital, both physical and human, lack of effective technology adoption (despite as a country having a tech sector to be proud of), and poor management practices. Much of the debate and talk of solutions focuses on the level of the wider economy, and there is less of a focus on how we can create high-performing organisations. A significant omission? Absolutely. One that needs attention? Without doubt.
At the organisational level, productivity is a difficult and challenging word. It is a loaded term and for employees can mean efficiency drives and redundancies, and a less than palatable manifestation of the words ‘doing more with less’. Ultimately, productivity is about producing more output in the same or fewer hours, but so often in organisational life ‘doing more with less’ means working longer hours, more intensely, instead of working smarter or more effectively. HR has also been the subject of criticism from some quarters, viewed as a drain on productivity as opposed to helping achieve higher performance. The HR profession has its challenges, but it must be central to any conversation about helping build more productive and engaging human-centric organisations.
It can be difficult to know how to measure productivity at an individual or organisational level, especially when outputs from work are not simple ‘widgets’ and are perhaps more intangible. That said, we all know when we are doing valuable work, making an impact, feeling engaged and are making the best of our talents. For organisations to be productive, HR plays a critical role in fostering positive workplace cultures that engender those experiences and feelings. HR practices that build trust, collaboration, purpose, continuous learning and growth, and wellbeing are central to any meaningful debate on productivity at work. HR also plays a critical role in ensuring the right management capability is in place and that staff are heard and feel that their views and experiences count. This is true in general but also true with respect to the opportunity offered by AI and the ever-evolving technology landscape. All the evidence suggests that effective adoption depends on affected employees being involved in the design, development and implementation of any technology in a way that ensures both performance and wellbeing.
HR needs to convince its Executive of the importance of people factors for performance and productivity. IES was an early mover in this space, delivering research to demonstrate the links between how people are treated and the performance of the organisations they work for, and developing a model to quantitatively demonstrate how improved employee attitudes can lead to better customer retention and sales performance. We also developed a convincing and evidence-based argument for the importance of leadership and management capability for productivity and innovation, a case which has been added to and made even stronger over the intervening years.
With the government’s renewed focus on productivity, both across the economy but also within public services, this year’s IES Annual Conference will be a platform for refocussing and shaping the debate on productivity to highlight the value of effective management of people and the contribution of enlightened HR practices. We would love for you to join us and to hear from engaging speakers, learn how others are tackling the productivity challenge, share your experiences with peers, and have the opportunity to go back to your workplace refreshed and with renewed ideas as to how to support people-centric productivity in your organisation.
The IES conference will take place on the 9th October at Broadway House, London. To book a place, please do so here.
If you would like to know more or discuss the conference, please email dan.lucy@employment-studies.co.uk or steve.orourke@employment-studies.co.uk
Any views expressed are those of the author and not necessarily those of the Institute as a whole.
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 Dan Lucy
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