1. Introducing interactive tool for business productivity benchmarking
Productivity is a measure of the amount of output a business produces for a unit of input. In its simplest form, labour productivity measures the amount of output produced per worker: higher productivity means that a business produces more output for each worker it employs.
Productivity is important because it is a key determinant of living standards in the long term. Growing productivity over time means businesses can produce more goods and services per unit of input (labour, capital and others), permitting higher wages, supporting economic growth, holding back inflation and increasing tax revenues, in turn making it easier for government to provide essential services. Its importance makes the UK’s relatively poor productivity performance since 2008 one of the UK’s biggest economic policy challenges, reflected in the prominence of productivity in the recently published white paper on the Industrial Strategy.
To help businesses better understand their productivity, and how they compare to other businesses, we have launched an interactive productivity benchmarking tool. This will let you calculate the productivity of your own business over time; and compare your productivity performance to other businesses in your industry. You only need three pieces of information: your turnover (or sales), your purchases of inputs (excluding investment), and how many people you employ.
2. Business calculator – Compare your business to others in Great Britain
- Labour productivity measures from the Annual Business Survey: 2006 to 2015
- Understanding firms in the bottom 10% of the labour productivity distribution in Great Britain: “the laggards”, 2003 to 2015
- Foreign direct investment (FDI) and labour productivity, a micro-data perspective: 2012 to 2015
- Management practices and productivity in British production and services industries – initial results from the Management and Expectations Survey: 2016
- UK trade in goods and productivity: New findings
3. Data sources and methods
Finally, our measure of labour productivity (GVA per worker) was calculated as aGVA at basic prices over employment. To derive our estimates of labour productivity, we excluded firms at the top and bottom 1% of the ABS sample as an outlier adjustment. Businesses can have negative productivity in periods where their expenditure on goods and services exceeds their turnover (sales) for that period.