UK productivity debate turns to skills use and workplace systems

UK output per hour has shown little movement since a decline in the third quarter of 2023, according to recent figures from the Office for National Statistics cited by Dmytro Spilka, director and founder of Solvid and Coinprompter. In a Finextra community opinion post, Spilka argued that large employers may be losing productivity through internal structure, technology fragmentation and poor use of existing skills, rather than through staffing levels alone.

The argument comes as companies continue to invest in technology and infrastructure while seeking stronger returns from labour and capital. For large organisations, the operational impact can be material: slow decisions, repeated data entry, duplicated work and poorly matched workloads can reduce output even where headcount and digital spending have increased.

Skills gaps may reflect deployment, not only hiring

Spilka said many businesses treat weaker performance as a recruitment problem, responding to falling output by looking for additional staff. He said hiring remains relevant, but should not replace scrutiny of the processes that determine how work is allocated and completed.

The Chartered Institute of Personnel and Development’s Good Work Index 2025 reported that one-third of workers say they have the skills to take on more at work. Spilka cited that finding as evidence that some productivity loss may stem from underused capacity already inside organisations.

In larger companies, he said, job titles and departmental boundaries can obscure what employees are able to do. Teams may continue to work within fixed roles even when business demand shifts, leaving some capabilities unavailable to managers who need them elsewhere.

Spilka said employers can address this by building more formal systems for identifying skills and assigning work across the business. The practical mechanism is straightforward: if managers can see worker capabilities beyond job descriptions, they can move tasks to people with available capacity and relevant expertise without immediately increasing headcount.

Digital investment can add friction

Technology was another area identified as a productivity risk. Spilka said companies often buy tools to solve specific problems, producing collections of systems that do not exchange information well.

In organisations where several teams need to coordinate, separate platforms can force staff to re-enter information, reconcile records manually or work around processes. Spilka said consolidation and integration of systems can reduce that friction, and cited Access PeopleXD Evo as an example of a platform designed to combine multiple functions.

He also said new tools require structured implementation and continuing staff support. Without adoption, technology investment can shift work from one bottleneck to another rather than improving output.

Wellbeing and management remain part of the productivity equation

Spilka linked productivity to employee wellbeing, citing heavy workloads, unclear expectations and weak engagement as factors that can reduce performance. He said large employers may struggle to detect declining engagement because of layered management structures and dispersed teams.

He also identified line managers as central to daily productivity. Clear organisational priorities, reliable communication tools and reduced administrative burden can help managers assign work more effectively, according to Spilka.

His conclusion was that the UK’s productivity challenge is complex for large workforces. Better use of skills, simpler technology and clearer management practices, he argued, can help companies lift output from the people and systems they already have.

This story draws on original reporting from Finextra Research.