UK companies are failing to put into place the right people strategies to meet business demands according to new research by global management consultancy Hay Group.

The research identifies 5 key challenges businesses are facing over the next 15 years, these include, collaboration, agility, transparency, innovation and productivity. The data was based on 500,000 UK employees and identifies that engagement and enablement levels have not increased since 2008, which are crucial elements in overcoming these challenges.

Martin Palimeris, Senior consultant at Hay Group says:

“The business environment is rapidly changing.  Our research shows that many companies don’t currently have the right strategies in place to respond to the challenges this brings through arguably their most critical asset – their people.

“Firms rated highest for engaging and enabling their staff achieve four and a half times the revenue growth of their lowest scoring counterparts and see up to 54 percent improvement on staff retention. People are the lynchpin to sustaining performance in this rapidly changing world, and organisations need to wake up to this. The successful organisations will be those that realise their employees are a unique asset and can help them meet the challenges both now, and as they intensify in the future.”


Big collaborations are required if change and making the right decisions are to happen. This will require bringing together teams, functions, organisations as well as competitors in order to reach solutions.

80 percent of UK organisations place team-working among their strengths but despite this 52 percent of employees say their teams are not adequately supported by counterparts elsewhere within the business. 42 percent feel that cooperation and sharing of ideas and resources are not readily encouraged.

Pallmeris comments:

“Collaboration is only set to get tougher, with a multi-generational workforce emerging that is increasingly used to working remotely.

“Often you get natural competitiveness in organisations, where teams have different objectives and are competing for resources.  Organisations need to make sure they have the right platforms and processes in place to support collaboration and that this is encouraged at a senior level. Fail to do so, and they risk leaving employees feeling frustrated and disengaged.”

Rebekka Tijsterman, global head of recruitment at Aegon describes why fostering collaboration is important for the global financial services firms:

“Aegon believes that business success lies in providing customers with the best possible experience. We have a responsibility to help our customers manage their financial future. Although this should be a given for any financial services firm, the financial crisis, alongside issues around certain products, has left people wondering whether this is always the case. Maintaining the trust of our customers throughout this period has depended on our continued delivery of a flawless end-to-end service. Internal siloes can often prevent employees fully understanding the customer journey, so we’ve worked hard to break these down and foster collaboration across teams.”


Along with collaboration, innovation has been identified as a key challenge that businesses are less prepared to respond to. 41 percent of employees don’t believe they’re encouraged to take reasonable risks to try out new ideas and ways of working.

Pallmeris adds:

“Traditionally there’s a strong culture of innovation in the UK, but at present many businesses are failing to take advantage of this.

“Many organisations are great at creating new products for their customers but fail to replicate this innovation internally.  Companies need to think about how they encourage and incentivize innovation. This may depend on them putting processes in place for employees to learn from colleagues across the business, or linking reward and recognition to innovation alongside performance.”

Tijsterman also discusses why Aegon sees engaging employees as critical to meeting the innovation challenge:

“In order to stay ahead, we need to be continually looking for new ideas and ways of doing things that pre-empt evolving customer needs. Success depends on engagement and a willingness at every level of the company to be able to think through a process and how it connects to the customer. Our people need to want to make things better.”


Improvement depends on innovation but keeping this and people focused on daily tasks is a fine balance that companies have to manage. Getting the right balance between innovation and execution is not easy feat, as innovation brings change, while operations require constancy to run smoothly.

Creating these environments help employees complete their tasks as efficiently as possible will be crucial. However, many organisations don’t have the right enablement policies in place. The research indicates that even with existing structures, productivity levels are far more from optimised. 54 percent of employees report that the staffing levels are in adequate in their particular area of business.

Ways to improve productivity can come in a variety of forms, from making sure staff are adequately trained, to prioritising wellbeing, to introducing digital technology to make employees’ lives easier.


Digital technology has helped to encourage an environment of transparency. Not only can businesses be held to account more easily, but social media has also made it easier for people to promote their skills and talents to find new jobs.

In light of this, organisations need to be more open about how they reward, manage and develop their staff. 53 percent of employees believe they are not paid fairly for the work that they do and 49 percent lack clarity on the possible career paths available to them. Meanwhile 37 percent of employees feel that there is a clear and transparent connection between their performance and their pay.

Ruth Jackson, head of engagement and communications, Whitbread and Premier Inn, comments:

“Transparency is more important than ever when employees can instantly make their feelings about working for Premier Inn public. We recognise the need to place as much focus on this as we do on guest communication and feedback.  We have a genuine desire to be a great place to work, and see transparency and trust as the way to drive this.”


Different ways of thinking are crucial in a fluid and complex business environment and only the most agile organisations survive. Continuous training and clear communication are critical in helping employees cope with changing demand. Despite this only 37 percent of employees say they are given enough time for training and 43 percent don’t feel their company communicates openly and honestly about change.

Working in an agile way requires a different way of thinking and behaving, and reacting to constant change with quick decision making at the right level. The data indicates this is an area that many businesses struggle with, as 36 percent of employees feel that decisions are not made at the right level and 59 percent are concerned about the speed of decision making in their firm.

In order to promote agility leaders need to ensure that decision making is seen as an opportunity for development rather than a burden. Leaders will need to successfully push decision making downwards and make people comfortable with delegation.

All of the above may paint a bleak picture for businesses, but as Palimeris points out, CEOs and business leaders are already viewing employee engagement as critical to future company success. He says:

“We’re now seeing business leaders sitting up and really listening to debates on engagement strategies, how these relate to business performance and their role in meeting the business challenges that lie ahead. While HR can lead the way in developing these, it’s not just an HR issue.  All areas of the business will need to be involved to develop and maintain these strategies and ingrain them in company culture.”

Ruth Jackson, head of engagement and communications, Whitbread agrees:

“Adapting to the changes on the horizon is the responsibility of the whole business. HR’s role is to hold a mirror up to the organisation, create awareness of the need for change and share vital information. We need to be asking the leadership team, ‘Have you thought about this?”