# Flexible pay can boost low productivity in the UK Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-26 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Improving UK Economic Productivity Through Flexible Pay Meta Description: Discover how UK firms can improve employee productivity through flexible pay. Learn more from David Brown, CEO of social enterprise, Hi. URL: https://financedigest.com/flexible-pay-can-boost-low-productivity-in-the-ukhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-888403752-1736814965946-compressed.jpg) **_![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/382-1736814965937-compressed.jpg)_** **_The_** **_UK is experiencing poor levels of productivity which is hampering the economy. David Brown, Founder and CEO of social enterprise, Hi, explains how UK firms can look to improve their employee’s own productivity through flexible pay._** The UK economy is struggling amid a cost-of-living crisis with millions of households in economic hardship. The leadership changes at [government level](https://www.financedigest.com/2016-must-be-the-year-of-board-level-transparency-and-good-governance.html "2016 must be the year of board level transparency and good governance") have raised discussion on how the economy can be kickstarted. An area which has been highlighted is the UK’s low productivity levels. Nothing is more important to a nation’s prosperity, to improving living standards, boosting growth, and taming inflation than strong and [sustained productivity](https://www.financedigest.com/5-ways-to-sustain-productivity-when-the-clocks-go-back.html "5 ways to sustain productivity when the clocks go back") growth. Historically, UK labour productivity has grown by around 2% per year but since the 2008 recession it has stagnated. The UK experienced no productivity growth between the first and second quarters of 2022. Figures released by the [Office for National Statistics](https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/articles/gdpandthelabourmarket/apriltojune2022) (ONS) show that between the first three-month period in 2022 and the second, productivity in the UK stagnated. While output per [hour worked](https://www.financedigest.com/low-use-of-shortened-work-hours-points-to-mild-german-recession-ifo.html "Low use of shortened work hours points to mild German recession – Ifo") in the second quarter was 1.7% higher than pre-coronavirus pandemic levels, output per worker fell by 0.6 % indicating that the growth in output per hour was because more people entered the workforce. In comparison to other countries, UK productivity is around [15% below](https://commonslibrary.parliament.uk/research-briefings/sn02791/) the US and France. The UK government should look at initiatives to improve productivity [levels through a new economic](https://www.financedigest.com/using-agility-to-resist-economic-instability-and-level-the-playing-field.html "Using agility to resist economic instability and level the playing field") strategy but there should also be an onus on individual businesses to improve their own productivity. **[Impact of financial](https://www.financedigest.com/how-mifid-ii-will-impact-financial-advisor-communications.html "HOW MIFID II WILL IMPACT FINANCIAL ADVISOR COMMUNICATIONS") stress** Businesses should assess why their [employees are being less productive in the workplace](https://www.financedigest.com/norway-wealth-fund-employee-sues-for-workplace-gender-discrimination.html "Norway wealth fund employee sues for workplace gender discrimination"). This can range from the time employees spend on commuting to and from work, a poor working environment, inadequate training of staff members and not placing the right people with the right skills in the right roles. There could also be process issues which hamper [workers from working](https://www.financedigest.com/1-in-5-uk-workers-believe-there-is-a-gender-divide-with-work-uniforms.html " 1 in 5 UK workers believe there is a gender divide with work uniforms") more efficiently which impact productivity levels. While there may be varying factors, one which shouldn’t be overlooked is the impact of an employee’s [financial wellbeing on their productivity](https://www.financedigest.com/50-of-consumers-wont-spend-more-than-20-minutes-applying-for-financial-products-online.html "50% of consumers won’t spend more than 20 minutes applying for financial products online").  A [study](https://championhealth.co.uk/insights/guides/cost-living-crisis-employee-wellbeing/) published this year, revealed that businesses are suffering a drop in productivity due to employees feeling the burden of financial stress. The study took evidence from [2,200 employees](https://hrnews.co.uk/employees-report-cost-of-living-crisis-is-causing-productivity-to-plummet/) and found 71% of professionals are experiencing moderate to high levels of stress. The [survey shows the cost-of-living crisis is causing those who experience financial](https://www.financedigest.com/new-york-holds-top-spot-london-second-in-z-yen-financial-centre-survey.html "New York holds top spot, London second in Z/Yen financial centre survey") stress to feel fatigued. 48% of those experiencing financial stress report terrible sleep quality and 47% [say this is leading](https://www.financedigest.com/britain-says-it-is-committed-to-leading-a-nato-task-force-in-2024.html "Britain says it is committed to leading a NATO task force in 2024") to anxiety. All of which is influencing negatively on employee’s productivity. This backs up previous findings by Close Brothers in the 2019 Financial Wellbeing Index which highlights that 94% of employees worry about money and 77% say this affects their work. This equates to 25 million people in the UK affected by money worries at work, which can only be expected to increase as the [cost-of-living crisis](https://www.financedigest.com/british-shoppers-defy-cost-of-living-crisis-at-christmas.html "British shoppers defy cost-of-living crisis at Christmas") continues. Worryingly, 89% of larger UK [businesses are impacted by employee](https://www.financedigest.com/why-investing-in-employee-health-can-be-good-for-business.html "Why investing in employee health can be good for business") wellbeing. Businesses not only suffer from reduced [productivity but can be impacted by a loss of talent](https://www.financedigest.com/talent-strategies-are-the-first-step-to-productivity-solution.html "Talent strategies are the first step to productivity solution"), increased short-term and long-term absences and higher healthcare costs. The impact of poor productivity due to stress and financial wellbeing is not just a UK phenomenon. In Australia, an [Impact Economics and Policy report](https://www.theguardian.com/australia-news/2022/aug/25/poor-mental-health-could-result-in-74bn-in-lost-productivity-in-nsw-report-finds)  found that lost productivity due to poor mental health in New South Wales could amount to $7.5bn if more is not done to support workers. This highlights the potential losses which poor productivity can have on the economy. **How** [companies can help through flexible pay](https://www.financedigest.com/spain-offers-to-pay-companies-testing-a-4-day-work-week.html "Spain offers to pay companies testing a 4-day work week") UK companies can improve their own productivity levels and support their workers by [enhancing employee’s financial](https://www.financedigest.com/cobots-in-the-financial-workplace-reducing-costs-attracting-talent-and-enhancing-sustainability.html "Cobots in the financial workplace: Reducing costs, attracting talent and enhancing sustainability") wellbeing. A way in which this can be achieved is by [offering employee’s more frequent and flexible](https://www.financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisis.html "Britain urges banks to offer mortgage flexibility in cost-of-living crisis") pay. This would [give employees greater control](https://www.financedigest.com/giving-women-the-power-to-make-money-and-take-control-of-their-destiny.html "Giving women the power to make money and take control of their destiny") over cashflow and allow for more efficient budgeting. It would also reduce the likelihood of people using [loans and credit](https://www.financedigest.com/6-reasons-to-take-a-car-loan-from-a-credit-union.html "6 Reasons to Take a Car Loan From a Credit Union") meaning concerns about long-term debt are lessened. A flexible payment policy would allow employees to choose how they access their wages on either a monthly, weekly, or daily basis. Pay day can be any day. Fintech’s which offer flexible [pay also provide supporting](https://www.financedigest.com/uks-sunak-to-halve-support-that-helps-businesses-pay-fuel-bills-the-times.html "UK’s Sunak to halve support that helps businesses pay fuel bills -The Times") financial data, such as real-time wage updates which can help employees manage their monthly budgets. [Employers would also benefit as enhanced employee](https://www.financedigest.com/why-more-companies-are-asking-new-employees-to-commence-employment-before-christmas.html "Why more companies are asking new employees to commence employment BEFORE Christmas.") wellbeing improves productivity. They can also help [attract and retain talent](https://www.financedigest.com/duecourse-attracts-former-apple-tech-talent.html "DueCourse Attracts Former Apple Tech Talent") at a time when competition for talent is fierce. [Flexible pay can also reduce](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS") absenteeism. This makes [business more efficient and ultimately](https://www.financedigest.com/the-ultimate-excel-sales-tracking-templates-for-businesses.html "The Ultimate Excel Sales Tracking Templates For Businesses") more profitable. At Macro-level, [businesses improving their productivity will in turn](https://www.financedigest.com/6-expert-tips-to-turn-your-photography-passion-into-a-business.html "6 Expert Tips to Turn Your Photography Passion into a Business") help the UK improve its productivity growth. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---