On a visit to Liverpool Ross McEwan put forward a five-point plan that he believes could boost the productivity of Merseyside and North West businesses by £3.7bn a year. Tony McDonough reports
Investing in the wellbeing of employees is one of five ways in which businesses in Merseyside and the North West could close its £3.7bn productivity gap.
That’s according to the chief executive of banking giant RBS/NatWest, Ross McEwan, who told LBN that companies that properly rewarded and valued their workers would reap the benefits.
Mr McEwan was in Liverpool to take part in a panel discussion at Liverpool FC’s Anfield stadium, organised by NatWest, which looked at how the region could close the productivity gap. Liverpool City Region Metro Mayor Steve Rotheram also took part in the discussion.
On Wednesday, NatWest unveiled research, conducted by Cebr, which reveals businesses in the North West could add up to £3.71bn a year to the UK economy if they introduced a series of productivity-improving measures.
Productivity is one of the biggest challenges facing the UK economy. Official data shows productivity fell 0.5% in the first quarter of this year and not only is there a gap between the UK and other developed nations – but also between North and South of the country.
The study identified a five-point strategy that it claims could help firms boost their revenues. They are:
- Reward your employees with benefits that improve their skills and motivation
- Create a collaborative workplace culture
- Focus on the wellbeing of your employees to increase their performance
- Help your employees set long-term career goals
- Equip your business with the equipment and technology you need to work as productively as possible
In the interview with LBN, Mr McEwan said: “Lots of people are talking about the productivity problem but the question is ‘what can our SMEs do about it?’. If the UK’s SMEs could match the productivity levels of those in Germany we could add an extra £57bn to our economy every year.
“But so often businesses don’t know where to start. We have identified five areas where they can make a start. It recommends things such as looking after the wellbeing of employees and help them to achieve their long-term career goals.”
At the International Business Festival taking place in Liverpool the dominant message has been around encouraging SMEs to consider trading overseas. Mr McEwan acknowledged the potential benefits of international trade, but added: “It is a chicken and egg situation.
“You have got to get your productivity up if you want to be able to compete effectively on the International stage.”
The study outlined the problem identified by Mr McEwan that even firms that wanted to improve their productivity didn’t know how to go about it. It found 43% of businesses don’t know what productivity means in practice.
He also admitted that in the years following the financial crash in 2009, UK banks were too focused on repairing their own battered balance sheets and didn’t do enough to help the nation’s SMEs. RBS itself had to be bailed out by the Government, which still retains a 62% stake in the business.
Mr McEwan added: “I think the criticism of banks was fair up until about three years ago. But I think that has changed today and RBS is the largest supporter of businesses in the UK. We have a £1bn lending fund to support manufacturing technical skills.”