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Cath Everett

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Uncertainty taking toll on morale

downturn

Four out of five senior managers believe that the current unsettled economic outlook is more difficult to deal with than outright recession, not least because they are finding it increasingly difficult to win staff buy-in for difficult decisions.

 
Just under half acknowledged that employees now had a jaundiced view of the sincerity of the leadership team, while two out of three confirmed that company morale was down. These are the findings of a study undertaken among 500 large UK companies by management consultancy Berkshire Consultancy.
 
Sarah Hunter, an account director at Berkshire, told HR magazine: “Leaders are in danger of losing the support of their teams. Tough decisions had to be taken during the recession, but today’s uncertain climate demands ever-changing strategies, resulting in a perceived lack of clarity from the top.”
 
The situation was not being helped by the fact that only 14% of senior managers believed they had the necessary skills to tackle current uncertainty effectively. Just under two thirds said the need to combine tough decision-making with motivational management was at the limit of their capabilities.
 
But Hunter said: “Good leaders do not need all the answers, nor should they pretend to have them. What they need is the agility to help their businesses grow, improve and evolve and to challenge the way that things are done.”
 
By adopting an authentic, honest approach, bosses would retain staff trust, even when tough decisions dampened morale, she added.
 
Only just under half of respondents expected to see business growth this year, however, while as few as 46% believed they would hit targets. To make matters worse, 84% said that current economic uncertainty meant they were finding it difficult to undertake budgeting and forecasting. Four out of five were struggling to device clear business plans and just under two thirds were having problems making accurate performance predictions.
 
After two years of major cost-cutting, three quarters also admitted that they were more risk-averse than ever before, with 53% saying that their organisation was now too cost-conscious to take advantage of any growth opportunities.
 
But the difficult situation does not seem likely to ease any time soon. The Recruitment and Employment Confederation (REC) said that both permanent and temporary hiring activity grew at its most sluggish rate for 10 months during August, while growth in pay also continued to slow.
 
Although the latest unemployment figures indicated that the number of people out of work fell by 49,000 to 2.46 million to the end of June, the REC pointed out that growth in the UK job’s market was slowing rapidly as public sector job freezes started to bite.

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