The Be the Business Productive Business Index is comprised of four clearly defined elements: performance of business; expected performance of business; actions taken to drive sustainable growth; and planned actions to drive sustainable growth.
It is designed to track not just firm performance, but also recent investments and focus, as well as plans for investment the key areas of management and leadership tech adoption, HR, development and HR, operational efficiency and innovation and ideas.
The headline Productive Business Index has increased sharply from 108.77 to 119.0.
Rising inflation, wage demands and increased costs of doing business has pushed productivity to the top of business and political agendas. Should supply chain disruption continue and inflation continue to rise, this focus will only intensify. But the UK’s productivity underperformance is longstanding and the average productivity of a typical UK business remains below that of our peers in Europe and elsewhere.
- A very large increase in the overall index of eleven points compared to a six point rise from Q3 2020 to Q1 2021
- The index is positive across all sizes, ages and sectors of business, however larger businesses with between 50 and 249 employees are at 122.3 compared to 117.6 for businesses with fewer than 50 employees
- Areas outside of London are performing particularly well – with the North East of England at 125.6 and the North West of England at 123.9, while for businesses in London the index is 116.9
Though concerns regarding cost and selling price inflation persist
- More than a third of companies forecast increases in selling prices and input costs
- Some 37 per cent forecast an increase in selling prices over the next three months – a rise from 26 per cent in the last index
- And 31 per cent forecast an increase in input costs during the next three months – up from 20 per cent in the last index
Use of digital, online and ecommerce continues to rise strongly
- Nearly four in ten (38 per cent) companies plan to increase investment in ecommerce over the next year, a rise of five per cent from the last index
- At present, 42 per cent believe they effectively use ecommerce versus 38 per cent in the last index
- And use of broader technology continues to increase, though investment in training declines
Meanwhile, companies are increasing time and resources devoted to innovation
- Nearly six in ten (58 per cent) companies believe they are good at generating new ideas and a similar number believe they are good at implementing those ideas
- The pace of innovation looks to have sped up over the past 12 months, with more companies having innovated or attempted to innovate
Evolution of HR and workplace practices continues 18 months after the coronavirus pandemic began as hiring challenges increase
- More than half of companies (53 per cent) are seeking to hire new employees currently
- However, of those seeking to hire, around a third are finding this more difficult than before the coronavirus pandemic began
- Meanwhile, 57 per cent of companies expect average pay of employees to increase across the rest of 2021 as inflation and the war for talent intensify