Dwindling UK GDP has highlighted the need for accounting, finance, and business advisory professionals to help improve productivity among British businesses, market participants have said.
“Advisers have a significant role given their knowledge of different industries and success stories,” says Jamie Sherman, partner at Moore Kingston Smith.
“They are invaluable when developing people strategy, improving recruitment, retention of talent, and training and upskilling.”
Sherman also highlights the potential impact advisers can have in connecting business to tech solution providers. This can “play a vital part” in improving productivity, he says.
The reaction follows a new research paper from the Chartered Institute of Management Accountants (CIMA) which notes the dip in UK productivity since the pandemic, and how businesses and advisers can work together to rectify the situation.
The paper draws on government data showing that UK growth lags 15 percent behind the US and France, and goes on to argue that it must “take concrete steps to develop world-beating productivity to drive economic growth”.
It also encloses survey results detailing the top barriers to productivity identified by finance professionals. They include difficulty hiring the right skills (18 percent); lack of adequate existing skills (16 percent); and inadequate management skills and practices (12 percent).
According to Andrew Harding, chief executive – management accounting at CIMA, advisers are critical in helping organisations to strengthen in these areas.
“The role of accounting and finance professionals continues to evolve at a rapid pace as they become more involved with data analysis, business intelligence and strategic thinking.
“We believe that they have a key role to play. They have the tools and the expertise, plus in the current economic environment, they certainly have the incentives to review and reform what their organisations can do to refine, track and boost productivity.”
Fraser Campbell, partner at Azets argues that advisers can bring the experience and proactiveness required to formulate a clear plan and help businesses act on it.
“As most accountants deal with wide range of different types of businesses, they can bring deep knowledge and expertise to SMEs to help them ask the right questions and make better decisions,” he says.
What can businesses do?
Campbell stresses the importance of establishing and modifying business plans according to the changing economic conditions, particularly for SMEs.
“SMEs are far more agile than larger businesses and can change their business tactics very quickly. This can to some extent offset the comparative lack of financial resilience that they have,” he says.
“So, if you need to pivot your business model, do it. Making the wrong decision isn’t usually fatal – inaction usually is.”
Similarly, Harding argues that processes such as reviewing supply chains and assessing future prospects are vital during this period of volatility, noting that, where possible, strategic reviews must be carried out in order to build resilience.
“Organisations can use this period as a time to reassess their business and financial goals, and adjust strategies accordingly,” he says.
“Leaders can improve the resilience of their organisation by undertaking an analysis of its strengths and weaknesses, as well as the opportunities and threats that it faces, and acting on the findings.”
The Covid-19 effect
The CIMA report goes on to highlight how the UK economy has developed a “long-standing productivity gap and failure to grow when compared to other major economies”, outlining 35 recommendations to support productivity and calling for the introduction of a national productivity strategy to replace the government’s existing ‘Plan for Growth’.
Underscoring this, the research also notes that if the UK was a US state, it would now be the nation’s poorest.
Much of this can be attributed to the economic hardship caused by the pandemic, Harding says.
“The pandemic has impacted all layers of the UK economy. It highlighted structural weaknesses such as high dependency on low-skill service sector jobs, regional imbalance, and weak social mobility.”
Sherman pinpoints the impact on people as arguably the pandemic’s most damaging effect when it comes to productivity.
“The pandemic has led to reduced investment in people, largely associated with remote working. Businesses have had to focus on keeping operations going and not necessarily productivity or efficiency improvements.”
He goes on to identify the highly-publicised ‘Great Resignation’ as a tangible and recognisable knock-on effect of this, arguing that this serves to further damage productivity levels.
“There are currently more job vacancies than ever before across multiple sectors. This has led to a mass movement in the employment market where a lack of experienced staff is causing lowered productivity.”