HRD’s admit that budget cuts were made in the wrong place at the wrong time

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Almost half of HR decision makers (46%) admit that during the economic turmoil of the last five years, budget cuts in their organisations were made in the wrong places and at the wrong time. In the Flux Report from talent management specialist, Right Management, four in ten HRDs (43%) acknowledge that their organisation made rushed decisions, which has had a negative impact on the business. As a result, 42% of HRDs said that they experienced increased tension with operational decision makers.

The research suggests that while HR directors recognise that strategic planning is vital for making the right decisions, their plans are quickly abandoned when faced with rapid change or budgetary requirements.

When it comes to workforce planning, more than a quarter of HRDs (28%) said that they set out to be strategically aligned with business needs, but in reality they ended up being reactive and budget driven. Even more companies (59%) admitted that their approach is purely reactive. Only 13% of HRDs described their approach to resource planning as largely proactive and strategically aligned with their business. This reactive approach is also apparent in how far ahead HRs plan for their talent needs. Worryingly, the majority of organisations (72%) said that they can only plan for up to a year ahead and around one in five plan as little as six months in advance.

Commenting on these findings, Nicola Deas, Career Management Practice Leader at Right Management, said: “It appears that having been caught up in flux, businesses have lost their ability to plan ahead and prioritise what needs to be done to move the business forward. With looming skills shortages, an ageing workforce and fast technological advances which we have seen in recent years, it’s now more important than ever that businesses plan ahead. Not just for a few months but for several years. Businesses face a huge talent gap by 2020 and sitting still and waiting to see what happens is not a sound strategy.”

In order to become more strategically aligned with business needs, 60% of HR decision makers believe that there needs to be better integration of HR practices into the wider business. Half (50%) also think that they can maximise HR’s value to the business by building the organisation’s capacity to change and sustain change.

Deas concludes: “In a constantly changing environment, a new approach to HR planning is needed. To succeed, businesses and individuals need the mind-set and skills to be able to change direction quickly to meet evolving business needs and trends.”

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