The UK has a problem with productivity. Data from the Office of National Statistics indicate that last year output per hour employed was 21% below the average for the other G7 countries and more than 30% less than France, Germany and the USA.

While high productivity doesn’t guarantee universal prosperity, few would dispute that poor productivity can have unwelcome consequences – relatively low levels of pay and high levels of poverty (particularly ‘in-work poverty’) plus damaging income inequality of the kind highlighted by Nobel Prize winning economist Joseph E. Stiglitz.

In truth the UK problem with productivity is not new. We have lagged behind the countries listed above for many years. Strangely, however, since the beginning of the recent economic downturn, this gap has widened. Contrary to the typical trend, and unlike in these other countries, UK productivity has not improved with the emergence from recession.

To quote Paul Johnson, Director of the Institute of Fiscal Studies: “On average private sector employees are producing no more per hour worked than six years ago. If normal rates of productivity growth had pertained we would be producing at least 15% more. That’s a huge loss. Recent figures suggest we have lost all the gains we made in 15 years prior to the crisis in catching up with countries like the US, Germany and France.”

Faced with an enigma like this, the economists and other specialist commentators are, of course, having a field day. Does the explanation lie in supply-side or demand-side considerations? Is the UK’s disappointing productivity a symptom of a skills shortage or an under-utilisation of skills? Does this deep seated condition merely reflect ingrained corporate governance practices and a financial system which encourage short-termism?

An article in the Financial Times from April of this year, ‘Weighing up the theories on the UK’s productivity gap’, by Ferdinando Guigliano, considers four specific explanations.

Firstly, ‘it is not as bad as it seems’ (the numbers are wrong); secondly, a lack in investment in new capital (workers operating with fewer and worse machines); thirdly, a fundamental misallocation of capital in the economy (risk-averse banks extending credit to established but less efficient businesses rather than to more productive start-ups) and fourthly, the slowdown in the amount of research and development undertaken by both companies and the state since the 1970s (a problem caused by what happened 40 years ago).

None of these arguments was felt by Guigliano to tell the whole story and, on reflection, with the emphasis very much on high level economic theories, there does appear to be significantly less focus than expected on workplace performance in the debates surrounding UK’s productivity puzzle. It is surely an important factor in the overall discussion.

In Gallup’s most recent global workplace study, for example, in the UK only 17% of employees were found to be engaged at work. By contrast, 57% were not engaged and 26% were actively disengaged.

It follows that if productivity is partly dependent on investment in human capital then the chances of this succeeding are enhanced when people are engaged at work. In this regard, therefore, the publication last week of the ACAS Strategy Unit report, ‘Building productivity in the UK’, is to be welcomed. While unashamedly viewing productivity through the prism of workplace performance, nevertheless this report provides a convincing case for addressing this missing ingredient within the overall analysis of the problem.

ACAS identifies seven wide-ranging ‘levers’ of workplace productivity. Given my specialism, it is good to see that high trust relationships are included as one of the drivers of a high performance workplace. The ACAS “markers” of such relationships are openness, honesty, information sharing, clear communication (especially from leaders), face-to-face interaction and joint problem solving.

While the context for this report is within the workplace, these markers also clearly apply to key external relationships, the effective management of which can also influence productivity. Engaged clients and customers, as well as engaged employees, within high trust relationships, can make a significant difference to both commercial efficiency and effectiveness.

As nineteenth century Dutch politician, Johan Thorbecke is attributed with the saying, “Trust arrives on foot, and leaves on horseback” (probably in a Ferrari these days). It needs careful nurturing and even more attentive maintenance. Trust is the cornerstone of business relationships and a key contributor to building productivity.