New year, new job?

Successful businesses have been urged to pay their workers more, to get them off minimum wage, and to get them skilled up

Are your skills and qualifications being used? Or is your effectiveness at work being held back, perhaps by poor management?

And are you looking for a new job, perhaps out of dissatisfaction? Quite a few fall into that category, with pent-up demand, after six years of downturn, for a move up or out.

Amid many questions about the economy in 2014 over the past couple of weeks, these have emerged as some of the most important.

While consumer spending has fuelled the start of the recovery, and as Christmas retail spending has been muted, most economists are agreed that's not enough to sustain the upturn.

They're looking for a pick-up in business investment to follow on the consumer spend. With new and more equipment, businesses can start to boost productivity.

Long-term weakness

Productivity is a concept beloved of economists, and it's vital to an understanding of the challenge the economy now faces.

Technically, it's a measure of how much is produced per unit of input. Less technically, it's what an employer gets per hour or per day out of employing a worker.

Until this downturn, British productivity was growing at just above 2% per year. That means the average worker was producing that much more, over and above the effect of inflation.

By international standards, that's not good. It's been a long-term weakness of the British economy.

But that's why workers could expect to increase their wages by more than inflation.

Without growth in productivity, real earning power can be expected to stagnate or fall away.

Hoarding workers

Flat productivity through this downturn has been a puzzle for economists. Previous recessions have had the effect of shaking out inefficient businesses. So productivity of the survivors, in total, has increased.

Not this time. For some reason, and no-one's sure what it is, productivity growth has stalled. One explanation is this downturn has been notable for employers 'hoarding' labour - retaining staff and their valuable skills while awaiting the upturn.

Many call centres offer little chance of a move up the career ladder

Many of those skills are being underused while so many people are doing less work than they want. There's less overtime on offer, and many of those in part-time work would like to have full-time work. Those elements constrain productivity growth as well.

Now, this may be one benefit of a flexible labour market, in contrast, for instance, with European neighbours. While it has downsides, it's allowed employers and employees to adjust to lower demand for their goods and services while restraining the rise in unemployment.

One economics commentator, Chris Dillow, recently calculated that if productivity had continued at its trend rate since the Westminster election in 2010, the downturn in output would have meant 1.85 million fewer people in work. He was making the point that the Chancellor, George Osborne, has had luck on his side in avoiding much higher unemployment.

Skilled up

So here's one of the problems the economy faces. While wages stagnate and while banks are hobbled, it can be more attractive to hire labour than to go to the banks to finance capital investment or skills training.

That's good for the job figures. But it doesn't tackle the problem of productivity or falling real wages.

And that's why we had the very unusual view of the boss of the CBI in his new year message, telling successful businesses they needed to pay their workers more, to get them off minimum wage, and to get them skilled up.

It's worth reflecting for a moment how odd it is to see that from John Cridland - the chief representative of the big employers, effectively admitting that the business model by which quite a few of his members operate is bad for the economy. He went on to say this should be the year for re-building trust in companies.

And his views chime with Professor Ewart Keep at Oxford University, writing in The Scotsman recently that too much of the economy is geared to lower skill levels and lower pay.

He is referring to service sector firms with large numbers of people who could be using their education and skills more effectively - in call centres, for instance. Many of them offer little chance of a move up the career ladder.

And the professor warned that with evidence of a shrinking range of job opportunities for graduate-level skills, that under-employment of skill reduces the incentive of people to invest in themselves.

Workplace trust

Promotions blockage or under-employed skills could be ways in which this could already be affecting you or those you know. I've been looking at recent research from the Chartered Institute of Personnel and Development (CIPD).

It shows nearly one in four people are looking for a new job. Of them, 62% are dissatisfied with what they're doing.

A separate piece of CIPD research showed that workers' trust in their bosses is strikingly low.

It found only 37% of employees say they trust their senior management, and 31% say they don't. It's worse in the public sector and in larger organisations, and it's nothing new.

For Business Scotland on BBC Radio Scotland this week, I interviewed Susannah Clements, deputy chief executive of the CIPD, hearing that companies have stripped out some of the "stepping stone" job promotions which were essential to motivating staff, and she hopes they can be reinstated.

"As things pick up, people don't' feel they're getting their fair share," she said. And if productivity is to pick up, it will need a better motivated workforce.

* You can hear more about the CIPD research and the pent-up demand for job moves on Business Scotland, BBC Radio Scotland, at 10am on Sunday 12 January. It's also on iPlayer or available by free download.