Peter Conway: Unions keen to get work moving

Peter Conway

Some people have been asking why unions are so interested in productivity these days.

Unions have always been interested in improved economic performance provided that the gains are shared. What has changed in recent years is that a consensus is emerging that the workplace is the right place to focus on getting such improvements.

This doesn't mean that big improvements in infrastructure are not needed - the low level of capital per worker is one of the reasons for our low productivity. But getting things right in the workplace matters a lot.

It is no secret that unions would like to see the response to labour shortages in higher wages and more investment in training and workplace organisation.

So unions will continue to argue hard for a fair share of what is available today. But we also want to be part of building a better platform to deliver a high-wage, high-skill, quality economy.

This is not an overnight task. The trick with productivity is to lay the foundations for continuous improvement.

Much of the recent Workplace Productivity Working Group report is about how to get the right investments in place to drive productivity improvements.

This includes capital and skills but also involves good workplace relations.

Getting the culture right so that people apply their knowledge and skills and make the best use of technology is vital.

This report identifies seven drivers and this is a useful framework for the challenge of improving productivity.

These are:

* Building leadership and management capability.
* Creating productive workplace cultures.
* Encouraging innovation and technology.
* Investing in people and skills.
* Organising work more effectively.
* Networking and sharing ideas.
* Measuring what works.

Some firms are probably doing well on all seven drivers, others on just a few. So part of the challenge is to develop a work programme that can get the best leverage from current best practice and lift overall performance.

This will not be easy. Unions want industry processes that involve workers and unions. There is not much point in a focus on the workplace if the workers are not part of the process.

Workers will be suspicious of any imposed agenda and, as we all know, the term productivity comes with a lot of negative baggage associated with restructuring, layoffs and work intensification.

Some employers will say, "How is this relevant to me?" Or, "I am doing okay and don't need to know about this".

In addition, we have the usual problems of how to reach out to busy people in thousands of locations in a long, thin country.

But we should not let these issues undermine the effort to improve overall productivity. Many people have the impression that we are a nation of small businesses and we are somehow different from other countries. This is not true. Although 96.8 per cent of firms employ fewer than 20 workers, 70 per cent of the workforce is in firms of 20 or more and 61 per cent of firms don't employ anyone.

Small firms are important. But if even the 3 per cent of firms employing 20 or more workers were involved in productivity initiatives, that covers more than two-thirds of the workforce. That's a good place to start.

New Zealand also has a number of advantages. One is that there is a developing consensus that it is time to focus on the workplace as a key element in economic transformation. There is also a growing consensus that our wages are too low and that we will not lift GDP per capita without increasing wages.

Business New Zealand and the Council of Trade Unions have been meeting to talk about productivity issues for two years now and will work together on the Government's work programme on productivity.

We probably will not always agree, but we both believe that this cannot be just a Government process.

Firms will learn best practice from other firms. Industries will develop new performance benchmarks as part of particular industry processes. There is a role for the Government, but it should not lead the process.

The CTU advocates an adult education programme on productivity. We believe that there is tremendous productive potential in the workforce that is wasted simply because the work environment, and workplace relationships, do not foster the opportunities that are there.

Workers are not interested in an imposed agenda on why they should improve productivity.

But there is a chance that, with the right approach, workers will become less suspicious.

The union movement is ready to engage in these processes. One of the challenges is to ensure that this time productivity improvements are seen as directly improving the welfare of workers, rather than the opposite.

* Peter Conway is the CTU economist and policy director and is a member of the Workplace Productivity Working Group.