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Employee productivity at five-year low

Sharp drop in 2011.

Photograph: Getty Images

PwC’s Key Trends in Human Capital 2012 report says that productivity levels saw a sharp drop in 2011, following a period of relative stability between 2006 and 2010.

The report suggests this is driven by an increase in employee costs, which have jumped 16 per cent from 2009 levels.

The survey suggests this increase in employee costs is largely down to companies cutting back on their recruitment of lower grade employees during the economic downturn. This has left companies with a higher proportion of experienced workers, compared to younger, less experienced workers.

The report concludes that human capital return on investment (HC ROI), an analysis of the pre-tax profit produced for every unit of investment per employee, has fallen to 1.11 in Western Europe. This means that employers are now only getting the equivalent of £1.11 back for every £1 they invest in human capital.

The report is based on data from over 2,400 organisations in over 50 countries.

The rest of this story can be read in economia.