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Half of UK firms struggle to invest to improve productivity: CIPD
[LONDON] Half of Britain's companies have had trouble investing in staff and new technology that are needed to improve the country's weak productivity performance, an industry body said on Friday.
The Chartered Institute of Personnel Development (CIPD) said the failure to raise productivity might make it hard for firms to cope with a higher minimum wage planned by the government.
Weak productivity has been a big problem for Britain and other advanced nations since the financial crisis and could weigh on how much workers can expect to earn in the future.
The CIPD said around a fifth of businesses were still operating in "survival mode" and were unable to spare resources for investment. A further 29 per cent said they had got the balance wrong between investment in people or technology. "Residual fears about a future downturn have left many organisations with a 'glass half empty' mindset which has held them back from investing, despite improved economic conditions," CIPD Chief Economist Mark Beatson said.
Finance minister George Osborne plans to raise the hourly minimum wage to 9 pounds by 2020 from its current 6.50 pounds.
Businesses in the hospitality, retail and social care sectors are likely to be challenged most by the higher minimum wage, the Resolution Foundation think tank has said.
The CIPD report showed a quarter of British businesses had continued to invest in equipment, technology and people and had increased productivity significantly.
Official data released earlier this month showed Britain was far less productive last year than its peers among the Group of Seven leading advanced economies, lagging them on average by the most since records began in 1991.