78% of UK businesses say the ‘cost of doing business crisis’ will impact profitability and see 85% of staff facing burnout
55% of senior UK business executives cite growth as their top priority over the next 12 months, but the tough economic climate and challenges in attracting and retaining key personnel are thwarting that growth. This is according to a new report from British software and services provider Advanced, which also reveals just one in five (20%) HR professionals say their employer uses continuous performance management as part of their growth strategy and one in six do not measure performance or productivity of the workforce in any way.
The 2022 Business Trends Report from Advanced, one of the largest of its kind in the UK, surveyed over 5,000 senior decision makers from across the UK and found that 78% of respondents were concerned that economic conditions will impact their organisation’s profitability over the next 12 months.
The report revealed that although growth is a top priority, following two years of disruption and uncertainty, 85% of respondents admitted that employees are working extra hours, and 38% say that is because they have too much work to fit into their allocated hours. This suggests that one of the biggest challenges for a remote workforce is maintaining boundaries between work and home life, something leaders must tackle if they are to retain their best talent.
The findings also showed that businesses are starting to invest more heavily in technology and solutions to aid productivity and profitability, with staff retention, increased security, deployment of new technology and a focus on ESG initiatives among the top reported priorities for this year.
The fact that one in six businesses across the UK are currently under-investing in performance management raises key concerns around their ability to effectively manage their people. Acknowledging when individuals need to be recognised and rewarded, or when to offer more support and training to improve performance and output has a knock on effect not only to business performance but more importantly employee retention.
“Following the disruptive challenges of the last two years, organisations have had to be agile in finding new ways to survive and thrive. Working from home has evolved into hybrid working that delivers the flexibility employees want, with the productivity employers require. However, this emerging model brings challenges when it comes to creating healthy workplace boundaries that ensure staff are motivated, engaged, and focused whilst measuring both performance and driving growth,” said Gordon Wilson, CEO, Advanced.
“With the data showing that 78% of respondents are concerned that economic conditions will impact their organisation’s profitability over the next 12 months, I would expect companies to be doubling down on the key strategies to achieve growth and profit, including performance management.”
Continuous performance management is vital for developing a fully engaged workforce, yet this is reported in just a fifth of organisations. 64% are still using some form of annual appraisal and 13% say they have no formal approach to performance management.
Gordon added: “Without ongoing performance management, businesses cannot gain a healthy and accurate view of the engagement and productivity of their workforce, vital requirements for organisational growth and success. With the ongoing talent shortages and a reported 1.3 million job vacancies in the UK, effective performance management has never been more important than it is today., The lasting impact of the pandemic combined with inflation, economic uncertainty and a turbulent global political backdrop create an unstable footing for businesses. If growth is indeed a priority, then businesses will need to get to grips with what is happening on the ground.”
The report also revealed:
Technology is crucial in supporting profitability, with 94% highlighting it as important or very important.
62% say their tech is ‘very important’ for profit - allowing them to work faster and smarter, and with better compliance and security)
Speed is of the essence, with more than half (54%) saying technology helps them with faster task completion.
58% say hybrid working has put them at greater risk of cyberattack, but 44% said cybersecurity was a main business priority for the next 12 months and 80% said they felt the organisation was properly prepared for a potential cyberattack
