What began as a deep dive into the UK productivity puzzle has transformed into a global research project on productivity and performance in the public and private sectors. Ross Archer, Director of Public Policy at AICPA® & CIMA®, outlined key research findings at the Spring 2024 meeting of the Government Performance and Accountability Committee.
Archer explained that over half of public sector respondents surveyed work in organizations that do not track productivity and are instead more focused on tracking inputs and outputs.
“We need to get better at identifying those qualitative measures and being able to track them in a much better way,” Archer said.
Key productivity and performance research findings
1. Private sector metrics: Private companies focus more on tracking measurable metrics compared with the public sector.
2. Centralized productivity tracking: The public sector could benefit from centralizing the responsibility for tracking productivity into a single role and function.
3. Innovation and flexibility: Hybrid working, new technology and organizational change are credited as driving productivity and performance.
4. People investment: Investing in talent and improving workplace culture could help improve productivity across both public and private sectors.
Drivers of improved productivity
Over the past two years, a combination of hybrid work models, technological advancements and organizational change have spearheaded productivity improvements across the board. These elements, coupled with a focus on talent and workplace culture, highlight a path forward for public and private sectors.
Barriers to increasing productivity
Both the public and private sectors face similar challenges when it comes to demonstrating and driving organizational productivity. However, these barriers appear more intensely felt in the public sector. Given the recognition of skills and talent as key drivers of productivity, and the recognition of hiring and retaining talent as a key barrier, there is a growing need for investment in skills development, training and technology to improve productivity in organizations across both public and private sectors. When it comes to investments in technology, nearly half of respondents in the public sector cited difficulties in securing funding for new technologies compared with only 23% in the private sector.
Emerging themes for government support
In the private sector, members would like to see business tax incentives, reduced taxation and increased investments in technologies for enhancing productivity, alongside strategies to promote training and skills development to maintain a competitive workforce and break down recruitment barriers.
Respondents from the public sector also highlighted the need for investment in public services for societal welfare and better pay and rewards for a motivated workforce.
The finance professional’s role in productivity
The research underscores the pivotal role of finance professionals, especially management accountants, in tracking and enhancing productivity. Management accountants are responsible for tracking productivity in 40% of the private sector organizations, according to the research. Their expertise is crucial for steering both sectors toward more outcome-focused productivity measures.
Five takeaways for improving public sector productivity and performance
1. Create clear accountability: Clarify who is measuring and tracking productivity within organizations and departments and focus on outcomes.
2. Leverage management accountants: Use their expertise for better tracking and performance.
3. Invest in people and technology: Investment in and focus on people and skills are as important as investments in technology for improving productivity.
4. Embrace culture change: Embrace organizational evolution and hybrid work for better results.
5. Look beyond cost-cutting: Improving productivity is not just about cutting costs, but also improving structures, processes, and technology, upskilling/reskilling and planning for the future.