A shift in priorities during the Covid-19 crisis has forced businesses to lose focus on performance and longer-term people strategy. That’s according to new research from Personio, the all-in-one HR software solution, which highlights the potential risk of a performance shortfall in the near future.

Although 88% of the 500 UK HR managers surveyed rate their organisation’s response to the pandemic as ‘good’ or ‘very good’, it’s clear that the pandemic has prompted businesses to pivot their plans and make some difficult decisions when it comes to the workforce. Over half of organisations have either reduced operating budgets (58%) or cut salaries in at least part of their business (42%) and over a third have removed bonuses (34%) – not to mention those that have undertaken redundancies (20%) or furloughing (64%).

But, with valuable time and resources redirected to support businesses through the pandemic, longer-term strategic people activity has been put on hold. Less than half (46%) of respondents confirm they have put a specific HR recovery plan in place to help the business return to normal after the lockdown.

Meanwhile, training and development as well as performance management have been pushed to one side during the pandemic – with two fifths (42%) of respondents saying they have had less time to invest in training and development, and a third (34%) having neglected performance management. Only recruitment and longer-term planning have suffered more (cited by 48% and 43% of respondents respectively).

With companies set to take an average of 13 months to recover from the effects of the pandemic, businesses must act quickly to preserve their future talent pool. But the research indicates that both lack of money and time for strategic thinking are holding businesses back on the post-pandemic road to recovery.

Over a third (37%) of businesses surveyed indicate a rapid recovery will be hindered by budget constraints – with one in five (20%) saying their HR budget had already gone down in the past year and 39% expecting it to decrease in the next twelve months. 27% respondents also cited a lack of time to put towards more strategic work as a significant barrier to recovery.

Hanno Renner, co-founder and CEO of Personio, said: 

“It’s natural for priorities to have changed during the Covid-19 pandemic, but if businesses want to come out on the other side of this period in a position of strength, it’s essential that they continue to invest in their future – and that means investing in their people.

“HR plays a pivotal role in supporting the management, development and performance of employees, as well as a business’s overarching people strategy, but doing this effectively becomes a lot more difficult if HR teams lack the time and budget to engage in bigger picture thinking. As we start to emerge from lockdown and the first phase of this devastating pandemic, businesses must move from short- to long-term thinking and ensure all teams, including HR, are equipped with what they need to do the same.”

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