UK workplaces undermined by too many rules, study finds

Unnecessary rules and procedures are a barrier to employee productivity.

Employers can unleash the productivity of their workers by allowing them more scope to use their initiative, create more stimulating work and reduce the burden of unnecessary rules and procedures, according to research.

A study by the Chartered Institute of Personnel and Development (CIPD), surveyed more than 2,000 UK employees, asking what enabled them to be most productive in their jobs.

The most common responses emerge as interesting work (40 per cent), being able to use their own initiative (39 per cent) and being given tasks which complement their skills (25 per cent).

On the other hand, the most common hurdles to employee productivity are unnecessary rules and procedures (28 per cent), not having the resources available to do their jobs (28 per cent) and office politics (24 per cent). 

Claire McCartney, research adviser at the CIPD, says that productivity at work has been a real focus this year for employers and policymakers, but the most important perspective on the productivity debate is that of employees themselves.

'This survey gives us unique insight into what workers feel affects how well they work, and the answer is much simpler than many would probably assume.

'Improving productivity is an ongoing, long-term project for the UK, but in the shorter term, employers can help employees use their skills and ideas by focusing on developing leaders and line managers who empower rather than control staff and by designing jobs which provide sufficient autonomy.'

Setting employees free to innovate and play to their strengths also involves an employment relationship based on trust and removing unnecessary and restrictive rules and procedures that get in the way of common sense and agility, McCartney continues. 

Engagement is also a key factor affecting productivity at work, and the proportion of engaged employees has dropped from 39 per cent to 36 per cent this year, with men more likely to be disengaged at work than women.  

Among those that are disengaged at work, 44 per cent feel they are over-qualified, indeed the survey also finds that overall, nearly three in ten employees (29 per cent) think they are overqualified for their role.

Engagement also has an impact on productivity, as significantly more disengaged employees (17 per cent) say they are less productive than neutral (5 per cent) or engaged (3 per cent) employees.

However, employees point to the solution to over-qualification themselves, with three fifths (61 per cent) suggesting that broadening their job role would make better use of their skills and experience.

McCartney says, 'There’s undoubtedly a mismatch of skills existing in the UK workforce, and we can see here how damaging over-qualification and skills mismatches can be to areas such as employee engagement, long-term retention and, of course, productivity.'

The CIPD is already speaking out on this issue and has called on the government to work with employers and other key stakeholders to develop a strategy to create more high-skilled jobs and improve skills utilisation in the workplace. 

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Get the creativity flowing in your business with these seven steps.

Managers can get people to be creative in a heartbeat, and they only need to keep people there for a few moments to achieve the magic of raised energy, higher motivation and increased creativity. Here's how.

A study carried out by analyst group Forrester on behalf of Adobe in 2014 found that companies that foster creativity outperform their rivals in terms of both revenue growth and market share. 

Fifty-eight per cent of respondents from "creative" companies (those that encourage a creative culture) said their revenues have strong growth (10 per cent or more year-on-year) versus only 20 per cent of less-creative businesses. Creative companies are also twice as likely to report a commanding market leadership position compared with their competitors.

In recent years, the focus for many companies has been on sustaining their business and simply surviving challenging times. Now, in a growing economy, how do managers recapture the magic and get the creative juices flowing again successfully in their business?

Here are a few tips as to how to do this:

(1) "What can you do?"

Instead of asking an employee directly what they are going to do to solve the problem (since this pushes them to make a judgement and be correct – very left brain), ask them what they could do or what they might do, as this encourages them to think of possible ideas, and communicates to them that you do not expect them to come to the right answer straight away.

(2) "What else can you do?"

Ask the question, "what else could you do?" Wait until the stream of ideas is exhausted and this process will again encourage real right brain thinking.

(3) Pose "what if..." type questions

These put people in pretend scenarios and takes away the fear of having to get the "right" answer straight away in order not to look foolish. "What if you had a week to solve this problem, not a month?", "What if you had a million pounds to solve the problem?", "What if you were Richard Branson?" These are all good questions to get the creativity flowing.

(4) Accept the answers for what they are

Accept the answers in the spirit in which you have asked them – see that they are part of a process of uncovering the best solution, and as such any idea is progress. 

(5) Show you care

Demonstrate through your coaching that you are more concerned with their success and development, than you are with the problem. After all, the problem is simply today's manifestation of that employee's situation, competence and attitude. 

(6) Don't leave the conversation without closing

Ask for a commitment. If the solution has popped out you can simply ask when the employee is going to put it into action. If the solution is still unclear, you should at least ask what their next step will be, or how they will move things forward. 

(7) Encourage regular brainstorms

Use the internal brand of 'jumpers for goalposts' in meetings to signify a 'time out' - a ten minute brainstorm. This will communicate that anything goes and that we can have a bit of fun. 

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Are there too many sole traders?

The Forum of Private Business is warning that despite the rise in the number of small businesses, not enough is being done by the Government to encourage business owners to take on new employees.

There are now 5.4 million businesses in the UK but the FPB has raised concerns about the high proportion of businesses that do not employ any staff.

UK SMEs are now responsible for 15.6 million jobs, up from 15.2 million last year. However, the latest figures also show that the number of unregistered businesses without any employees has risen to over three million and now represents around 56% of the business population.

According to the FPB, this is an issue for the UK economy as non-employers are less productive than employers - having a turnover per person of £53,000 compared to an SME employer figure of £135,900.

Ian Cass, md of the FPB, said: "An increased number of businesses, particularly those that have reached the VAT threshold, is great news as it shows the strength of the UK economy. However the lack of growth of businesses at each step of the economic cycle is poor, with Government bodies imposing cost and barriers on businesses rather than looking to solve them."

The Forum says many micro businesses find that it does not pay to employ more staff; the regulatory system, it says, inhibits growth as firms use freelancers rather than training and employing new staff. It highlights the example of hairdressers that find it cheaper and easier to take on a self-employed hairdresser rather than employ a trainee.

The UK needs a business infrastructure that rewards business owners who employ people, said Cass, "not one that demotivates them with new ways to shuffle paper. Getting more businesses to employ, export and grow quickly when the opportunities arise are crucial to creating a better living standard for all, not simply the business owners or their employees."

He said: "Successive governments have failed to answer the small employer's question of why can't it be simpler to employ and grow my business? We need a competitive and consistent marketplace to do business in."

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How to use Pinterest for small businesses

Lizzie Sibley, community marketing manager at Pinterest UK, outlines how small businesses and brands can use the platform to really get their content noticed.

What exactly is Pinterest?

Contrary to what most may think of the platform, Pinterest doesn’t categorise itself as a social network. Instead, it sees itself as a “visual discovery tool” which people use to plan projects around interests and passions.

“We would compare ourselves to a search engine. People use us to ask questions, to solve problems, to find out more information. We are not taking on the big guys because what we do is slightly different. We're very good at answering ambiguous questions that don't have a direct answer,” Sibley explains.

For example, people use the platform to ask, ‘What shall I wear this evening?’ or ‘What should I cook for dinner tonight?’

There are 100 million users globally, Sibley says. Around 45% of these are international and 80% use Pinterest from their mobile.

Pinterest has also recently launched ‘Buyable Pins’ which allow users to buy things directly from the platform; a useful tool for businesses.

Pinterest as a search engine

A year ago, the platform launched what it calls guided search. This is where a user inputs a search term, i.e. ‘white shirt’ and it suggests words associated with the term.

This is handy for seeing what words are associated with your area, or brand and provide content based on this. For example, if you search for ‘retail business’, ‘plan’, ‘ideas’, ‘online’ and many more appear below to help people drill down what they’re searching for.

A post on Pinterest (or a pin) is not an image. As Sibley explains: “It's a visual bookmark and should link to a source where the image came from.”

In addition, Pinterest doesn’t ‘crawl’ its site the same way search engines like Google does as the content is curated by “humans with interests and passions”.

Do many people use Pinterest?

There are 100 million users globally, Sibley says. Around 45% of these are international and 80% use Pinterest from their mobile. A third of millennials (16-35-year-olds) are on the platform.

According to Sibley, people are using Pinterest for really everyday things: “Everyone who's ever got married in the last few years has probably used Pinterest. We are a planning tool and it's one of the biggest days that most women and men plan in their lives.

“But it's not our biggest category. Redecorating your home, that's a really big category. DIY, planning any other sort of event or party, even buying a new car or taking a holiday; this is how people are using it so think how your brand inserts itself into the user's particular moments,” she advises.

Tips for using the platform

It takes mere minutes to set up an account, and you can then request that it gets transferred to a business account, with which you can use analytics to see how your pins are doing.

Don’t just treat the site as an Argos catalogue, and don’t just pin your products. Instead, Sibley says, think of creative ways to present them such as ‘lookbooks’ for fashion and lifestyle related content. One example of how it’s really well used is online marketplace Etsy.

Content on Pinterest is evergreen, so you can pin anything, at any time. People will just find it when it’s relevant to them. Sibley says seasonality is huge on the platform and Christmas was even trending at the end of August. It’s worth building your content around anything seasonal from pancake day to Valentine’s Day to fireworks night.

Other tips include:

• Get your clients and customers sharing your content
• Make sure descriptions under pins are really detailed as this will act as the way people find your content
• Hashtags are almost useless on Pinterest, so don’t use them. Stick to well-written, detailed descriptions
• Be positive with your language and your message. Sibley says: “Pinterest is a happy place! Including a positive sentiment on your pin really helps engagement levels.”
• Don’t make pins look like banner ads, Pinterest is a very personal place
• Two-thirds of content on Pinterest is brand content
• Use ‘lists’, text overlays and include really clear calls to action. Let people know what will happen when they click on the pin
• Use vertical pins: With 80% of mobile traffic, you’ll have lots more ‘real estate’ on someone’s device if you use vertical pins
• Avoid amateur content. Use a tool like Canva to create unique, high-quality pictures

It’s also worth knowing that 85% or content is consumed via search rather than your homepage. People rarely land on your Pinterest homepage, so take that into account when pinning content, Sibley says.

And don’t delete pins or boards as someone may have linked to them. Instead, change the name and content inside if you must.

For more Pinterest business tips, visit its dedicated business resource centre.

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Workie says: ‘Don’t ignore the Workplace Pension’

A new character hits TV screens as a bold new multi-million pound campaign aimed at smaller employers and their employees is launched.

A new character is introduced to Britain’s television screens this evening (Wednesday 21 October) with the launch of a campaign which aims to change the country’s perception of pensions in the workplace.

Tonight will be viewers’ first introduction, as he makes an appearance between Emmerdale and Coronation Street at 7.25pm.

The humorous ads come with a serious message. While automatic enrolment into workplace pensions has been rolling out across the UK since 2012, it is only now that 1.8 million small and micro employers are being required to take action to help their staff to save for later life.

In a phased process over the next 3 years, every employer will have to enrol their eligible staff into a pension scheme by law.

The new campaign – which comes with the hashtag #DontIgnoreIt – was launched today by Pensions Minister Baroness Altmann. The minister, who was personally involved in designing Workie, unveiled him on the digital billboard at London’s Piccadilly Circus.

Pensions Minister, Baroness Altmann, said:

We have made great strides forward by automatically enrolling more than 5 million people into a workplace pension – now the challenge is to make sure hardworking people with every type of employer get to enjoy this major financial benefit.

This is a fun and quirky campaign but behind it lies a very serious message. We need everyone to know they are entitled to a workplace pension – and we need all employers to understand their legal responsibility to their staff, but also to feel more positive about engaging with workplace pensions.

This government is committed to providing security for working people at every stage of their lives, and that includes giving people the chance to plan for a financially secure retirement. 

Automatic enrolment is a big part of that.

Since 2012, more than 5.4 million workers have been automatically enrolled into a workplace pension by almost 61,000 employers. By the time the process is complete in 2018, it is estimated that around 9 million workers will either be newly saving or saving more into a workplace pension thanks to the policy.

The new campaign will include radio, print, online and outdoor advertising and will run for the remainder of this year and into 2016. It is being coordinated jointly by the Department for Work and Pensions and The Pensions Regulator.

Chief Executive of The Pensions Regulator, Lesley Titcomb, said:

Automatic enrolment has been successfully introduced across the UK’s large and medium employers. This campaign aims to raise awareness amongst small and micro employers that they cannot ignore workplace pensions.

Our website and the letters we send out to employers have been updated to ensure they have clear information that is relevant to them and helps them understand what they need to do, and when, to comply with the law.

Automatic enrolment has already fundamentally changed the way society approaches saving into workplace pensions. Instead of opting in, as was the case in the past, all qualifying employees of large and medium-sized firms are now automatically enrolled by their employer provided they are over the age of 22 and earn more than £10,000 a year.

This means that, as well as paying in themselves, their employer also makes a contribution to their financial future.

Figures show that only around 10% of people who are automatically enrolled are choosing to opt out, significantly fewer than was expected when the policy was first developed.

As a result the total amount that is expected to be saved each year by 2019/20 has been revised upwards to about £15 billion – more than a third more than the previous estimate of around £11 billion.

Click here for more information about workplace pensions 

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Small firms hope for banks' stranglehold to be smashed open

The Competition and Markets Authority could force banks to make it easier for small firms to jump ship if they are unhappy with their service or can get a better deal elsewhere.

The small business banking market could see the biggest shake up in this week’s Competition and Markets Authority (CMA) report into the finance sector, bankers predict, as the industry is noticeably less competitive than the rest of the banking market.

While individuals can switch their current accounts to a new bank in seven days, taking their direct debits and inbound payments with them, small businesses find it harder to use the service.

“We are expecting something on SME switching,” said one bank source. “It could include sharing more information on business customers and their credit scores.”

There are serious practical hurdles, however, which make it difficult for the CMA to simply order a change in the way banks behave.

“The legal barriers to switching are much greater than in the personal current account market,” said one bank source.

“There are lots of mandates attached to accounts, there might be charges on properties, some asset finance arrangements, an overdraft on a cash account… it is much much harder to sign that all away.”

Another said that banks do not want to offer huge amounts of credit to small businesses by accident.

“If an SME has an account with an overdraft, then goes to a new bank to open another account but does not close the first account, it could end up with double the overdraft facility,” the insider said.

While this may not be a worry for the business itself, which has managed to double its credit lines, each bank may be concerned that it does not know the full extent to which its customer is indebted.

As a result these legal difficulties mean the CMA may be more likely to tell banks to work harder to cut barriers to switching, or the agency could use the rest of its time investigating the market to come up with a more comprehensive arrangement.

The CMA is expected to tell banks to make charges on personal current accounts clearer to customers, as the products which give the impression of being “free” to consumers often charge fees, from overdraft costs to interest payments foregone.

However, despite concerns than just 2pc of Britons switch their account each year and the widespread perception that the industry takes its customers for granted, a study from the Institute of Consumer Service indicates banks are improving their offerings rapidly.

Its surveys have found banking is the only industry where satisfaction ratings have consistently improved over the past three years, with customers now giving the industry a score of 78.6 out of 100. As a result, banking has climbed from the seventh most popular industry in the UK to the fourth most popular, out of the 13 sectors studied.

The ICS’ chief executive says this is evidence that competition is starting to work in the industry.

“Now that customers can switch bank accounts within seven days, they are more aware of the options and more likely to consider changing,” said Jo Causon.

“There is no longer apathy brought about by uncertainty meaning that strong customer service is now a key competitive advantage in the marketplace. In what is becoming a relationship driven economy, if customers are not happy they will vote with their feet and move to the competition.”

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The best leaders are constant learners

As Juan Manuel Fangio exited the chicane before the blind Tabac corner in the 1950 Monaco Grand Prix, he stomped on the brake. It was a counterintuitive reaction for a racing driver exiting a corner — but one that likely saved his life.

By slowing down he avoided ploughing into a multi-car pile-up, which was just out of sight beyond the turn. In racing folklore, Fangio’s evasive action is considered a miracle. But why did he slow down?

The day before the race, Fangio had seen a photograph of a similar accident in 1936. As he approached Tabac, he noticed something about the crowd – an unusual colour. Fangio realised that, instead of seeing their faces, he was seeing the backs of their heads. Something further down the road had to be attracting their attention. That made him recall the photograph, says HBR.

Like Fangio, leaders must scan the world for signals of change, and be able to react instantaneously. We live in a world that increasingly requires what psychologist Howard Gardner calls searchlight intelligence. That is, the ability to connect the dots between people and ideas, where others see no possible connection. An informed perspective is more important than ever in order to anticipate what comes next and succeed in emerging futures.

As the saying goes, “The best way to predict the future is to create it.” But how can business leaders make meaning of a playing field that is constantly changing shape?

The Best Leaders are the Best Learners

To find their way in societal shifts, leaders cannot rely on static maps, nor can they hope to manage complexity through fixating on the details. To do so would be to fall into the trap described by Jorge Luis Borges and Adolfo Bioy Casares in their 1946 short story “On Exactitude in Science,” in which empire cartographers draw up a map so detailed – the scale is a mile to a mile – that it ends up covering the whole territory and leads to the downfall of the empire. It’s a story of absurdity and unintended consequences, surely two things leaders today can appreciate.

Reinvention and relevance in the 21st century instead draw on our ability to adjust our way of thinking, learning, doing and being. Leaders must get comfortable with living in a state of continually becoming, a perpetual beta mode. Leaders that stay on top of society’s changes do so by being receptive and able to learn. In a time where the half-life of any skill is about five years, leaders bear a responsibility to renew their perspective in order to secure the relevance of their organisations.

As we attempt to transition into a networked creative economy, we need leaders who promote learning and who master fast, relevant, and autonomous learning themselves. There is no other way to address the wicked problems facing us. If work is learning and learning is the work, then leadership should be all about enabling learning. In a recent Deloitte study, Global Human Capital Trends 2015, 85% of the respondents cited learning as being either important or very important. Yet, according to the study, more companies than ever report they are unprepared to address this challenge.

John Hagel, John Seely Brown, and Lang Davidson have described the shift toward a massive transformation from institutions designed for scalable efficiency to institutions designed for scalable learning. The key is to find ways to connect and participate in knowledge flows that challenge our thinking and allow us to discover new ways of connecting, collaborating and getting work done faster, smarter and better.

Personal Knowledge Mastery

Sustainable competitive advantage depends on having people that know how to build relationships, seek information, make sense of observations and share ideas through an intelligent use of new technologies. To help leaders do that, we’ve developed a process we call Personal Knowledge Mastery (PKM), a lifelong learning strategy. It is a method for individuals to take control of their professional development through a continuous process of seeking, sensing-making, and sharing.

Seek is about finding things out and keeping up to date. In a world overflowing with information, we need smart filters to sort out the valuable information. It requires that we regularly evaluate and adjust the information sources that we base our thinking and decision making on. What matters today is being connected to a wise network of trusted individuals who can help us filter useful information, expose blind spots and open our eyes.

Sense is how we personalize information and use it. Sensing includes reflection and putting into practice what we learn. It is a process based on critical thinking where we weave together our thoughts, experiences, impressions and feelings to make meaning of them. By writing a blog post or noting ideas down, we contextualise and reinforce our learning.

Share includes exchanging resources, ideas, and experiences with our networks as well as collaborating with our colleagues. Sharing is a contributing process where we pass our knowledge forward, work alongside others, go through iterations and collectively learn from important insights and reflections. We build respect and trust by being relevant when we share to our social networks, or speak in front of a crowd.

There is a wide range of digital tools out there for each of the PKM activities that can be fitted into a busy schedule and help people become self-directed, autonomous learners. Which tools to use depends largely on the context and personal preferences. Tools are important, but mastery in a digital age is only achieved if you know how to establish trust, respect, and relevance in human networks.

By seeking, sensing, and sharing, everyone in an organisation can become part of a learning organism, listening at different frequencies, scanning the horizon, recognising patterns and making better decisions on an informed basis. Just as Juan Manuel Fangio did it in the 1950 Monaco Grand Prix.

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Number of UK businesses hits new high

The number of private sector businesses in the UK has hit 5.4 million, a new record.

According to Government figures, there has been a net increase of 146,000 businesses in the past year, taking into account all start-ups, closures, takeovers and mergers. It means more businesses have started than closed.

The Business Population Estimates also show the number of businesses that employ people has grown for the second year running, with 35,000 more at the start of 2015 than in 2014.

Small businesses continue to make up 99.3% of all businesses and generate over £1 trillion turnover for the UK's economy.

There has also been an increase in the number of medium-sized businesses, which employ between 50 and 249 people, with 1,000 more of these firms at the start of 2015 than in 2014.

The figures also show there are 7,000 large businesses in the UK that employ over 10 million people and make a significant contribution to the economy (£2 trillion turnover).

The overall business population includes 3.3 million sole proprietors (62% of the total), 1.6 million companies (30%) and 436,000 ordinary partnerships (8%).

Business minister Anna Soubry said: "It's fantastic news there are now a record number of businesses in the UK, creating jobs and ensuring our country's economic security."

She added: "Our long-term economic plan has helped create the conditions for businesses to start, grow and flourish. But with risks in the global economy, this government is determined to continue to back our businesses and grow our economy."

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The surge in later life entrepreneurs

Supporting research AXA Wealth conducted earlier in the year, a survey by O2 Business has found that a quarter of over 55s are looking to become later-life entrepreneurs.

Highlights from AXA Wealth’s later-life entrepreneurs study
 • over half a million over 55s are considering taking advantage of new pension freedoms to start a new business
 • almost half intend to use 25 per cent tax-free lump sum to fund their start-up
 • a third (35 per cent) driven by dream of owning own business

 The top three reasons stated for starting a new business with released pension funds were: 
 1) realising a lifelong dream to be a business owner was cited as the top motivation by over a third (35 per cent)
 2) monetising a hobby was revealed as the investment incentive for a quarter (25 per cent)
 3) nearly one in five (19 per cent) are driven by the urge to utilise the experience and skills gained throughout their professional career in order to supplement their pension income.

 Margaret Mountford, known for her role in the BBC’s The Apprentice said:

 “This trend has come about as a result of a combination of things: longevity, health, and the fact people can get hold of some of their pension money. You may think the word pensioner suggests that image of the old people crossing the road, but it’s not like that now. People are looking for a lifestyle change – doing something different but staying active. Although, I think it’s easy to get carried away by an idea and see it through rose-tinted glasses. Starting a business may look easy, but it isn’t.”

 Adrian Lowcock, head of investing at AXA Wealth, comments;

 “We’re seeing a revolution when it comes to retirement spending. The widespread concern that pensioners will blow their whole pension on a supercar feels exaggerated. Instead we are seeing a diverse approach; with the over 55s taking to the freedom and opportunities created by the pension reforms – in this case fuelling a whole new generation of later-life entrepreneurs.”

 “But with more choice and freedom inevitably comes more risk, and although small businesses are the backbone of Britain, most fail to make a profit and end up losing all their investors’ money. For the majority of people it is not an appropriate use of their pension pot.

You wouldn’t want to risk your hard-earned pension money, so anyone considering investing in a small business needs to consider what the loss of their investment and retirement income, would have on the quality of their retirement.”

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Firms must adapt or die in the wake of the National Living Wage

By Nigel Crunden

The implementation of a national living wage, set to come into force in April 2016, has been met with a wave of outcries from UK businesses. Companies will be expected to pay staff £7.20 per hour rising to £9 by 2020.

In the latest of concerns raised by companies, major retailer JD Sports has said the living wage will impact its ability to take on more staff, while Whitbread, which owns Costa Coffee, also announced it would need to raise prices in order to pay staff a living wage.

The media has been rife with negative comments, but there are measures that businesses can take to absorb the costs of an increased wage bill.

The national living wage will soon become a reality for UK firms and in order to manage its potential impact, owners need to holistically assess other areas of the business such as procurement, supplier management and staff productivity to drive cost savings and plan ahead. 

Improve your supply chain

Many businesses fail to recognise the importance of working with suppliers closely, but by selecting a few key partners, better service levels can be achieved. Look for suppliers that can offer multiple services and goods under one roof as a way to streamline costs to offset against a rise in the minimum wage. 

Vendors are now expected to have the ability to become more than just a supplier, but act as an extension of their client’s business by providing consultation and bespoke solutions.

Consolidating suppliers has several benefits for business performance. With fewer suppliers on board, the ordering process becomes more straightforward allowing businesses to challenge suppliers to provide further support where needed. By having a smaller roster of suppliers, this reduces complexities within the supply chain and greater control is retained by the business. 

As margins are set to become squeezed for businesses with a large contingency of workers being paid the minimum wage, it is those that assess the wider picture and take a health check of current procedures and practices that will come out stronger.

Change your workspace

One particular area that companies often overlook is how they can maximise the use of available space and create an adaptable working environment. By introducing mobile desks, wireless workstations and moveable partitions, companies can easily make changes to a workspace without the need for expensive redevelopments. 

In addition to this, by removing any unwanted files packed away in storage cabinets, businesses can operate more cost-effectively and reduce the overall square footage required by the business. 

Many firms still have stock rooms filled with files, old furniture and outdated technology. In order to free up these areas for a more productive purpose, documents should be scanned and stored electronically via cloud computing, as well as protected by a back-up system to guard against data loss. 

Keep workers motivated

Further to this, companies should scrutinise the working environment itself and how it can be used to keep staff motivated. A motivated workforce is a productive one and by offering a working environment in which staff can thrive, productivity levels and output can be increased. 

While we have considered how consumer-facing industries such as retail can reduce costs to offset the impact of a living wage, for office-based environments, employers have more flexibility to cater for different working preferences. We’re now seeing a movement towards more flexible working patterns where employees are trusted to complete tasks to a high standard within their own time. 

Businesses are realising that installing trust and handing a sense of responsibility to individual workers is helping to increase motivation and, in turn, the efficiency of their business operation.

Workplace design has now come full circle following a rise in exclusively open-plan offices.

There has been a realisation by many employers that working in close proximity to fellow employees through benching and shared pod furniture can be distracting.

Businesses can increase staff productivity and output by creating a balanced environment which allows for collaboration and group discussions, as well as installing quiet zones or space divisions for workers to complete cognitively challenging tasks. 

Large tech companies such as Google and Facebook have led the way in creating offices that inspire collaboration, where individual working spaces and desks are easily interchangeable and employees can easily engage in group discussions and then lock their stations down to concentrate on an individual task.

Through focusing on changes that can potentially increase productivity and make cost savings, business owners can address the financial impact of a national living wage. Standing still is no longer an option and it is those companies that look to other areas of the business to plan ahead for a rise in staff costs that will ultimately win the day and move ahead of the competition. 

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Ten simple ways to improve your cash flow

We’ve all heard that old adage, "cash is king", but it is still relevant today – and perhaps in this competitive, fast-moving world, it is even more important. Here are ten ways to improve your cash flow.

Without a steady flow of cash, your business will run into serious trouble. You won’t be able to pay bills or your staff, make purchases or plan for the future.

Here are ten ways to improve your cash flow and boost your financial efficiency:

1) Forecast your cash flow

It may sound obvious, but it is surprising how many businesses don’t maintain an accurate cash flow forecast. Look at how much cash is coming into your business each month (cash inflow) and how much is going out (cash outflow). With a regularly updated forecast in place, you should be able to identify seasonal peaks and troughs and plan business activities to ensure there is always cash to make payments.

2) Mind the gap

Good cash flow management is all about creating a balance between those cash inflows and outflows. Gaps appear when there is more money going out the door than coming in, leaving your business short. Spot the gaps before they become gaping holes by taking proactive action e.g. chase overdue invoices; negotiate new payment terms with suppliers, etc.

3) Speed up your cash conversion

Convert your products and services into cash as quickly as possible. The sooner you collect cash, the faster you can use it to increase profits or meet financial obligations such as wages or debt payments. Tips for speedier cash conversion include: start sending out invoices immediately after the delivery of goods or services; change your payment terms from 60 days to 30 days and consider offering a small discount to customers who pay their bills early.

4) Make it easier for customers to pay up

Fed up waiting for business cheques to clear? Reduce delays by encouraging customers to make online payments.

5) Create a collections process 

Stay on top of overdue payments. Many companies operate a system of reminders that become gradually more serious and formal as invoices become more overdue.

6) Offer credit cautiously

Proceed with caution when it comes to offering lines of credit. According to Dun and Bradstreet, more than 90 per cent of companies grant credit without checking references. Failing to do your homework and checking references puts your business at risk, saddling you with non-paying customers and racking up bad debt.

7) Keep an eye on cash flow continuously

It has been said "look after the pennies and the pounds will look after themselves". If you don’t have a finance manager, consider training an employee to monitor cash flow on a daily basis to ensure there is always sufficient cash in the bank.

8) Plan for any cash shortfalls

Have a strategy in place to meet any cash flow bottlenecks head on. A good, old-fashioned bank overdraft facility may help to tide you over or a short-term loan. Don’t be afraid to shop around for the best deals and keep your bank informed over any big changes to your cash flow forecast.

9) Consult an expert

Sometimes we need help looking at the bigger picture. Working with a specialist bookkeeper or an accountant can be a valuable investment – providing insight into areas that you may have overlooked and helping you with you with your cash flow forecasting to anticipate and plan for cash flow problems.

10) Control business expenses

Look at ways to save money on expenses to improve your bottom line. If you don’t already, start tracking business expenses to stay on top of outgoings.

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