Productivity, Culture, and Focus at Risk: The Expensive Consequences of Post-Pandemic Work

HR Studie Folgen der Pandemie

Throughout 2020, companies tended to have one thing on their agenda: putting out fires. In this role, HR excelled and became adept at handling these complex and ever-changing challenges. That said, a consequence was that strategy often fell by the wayside — and now we are seeing it take its toll. Companies are facing higher turnover and declining productivity en masse. 

In our most recent study, we asked HR decision-makers and employees in seven European countries* about their assessments and experiences during the course of the pandemic year. These are the key findings we uncovered.

*Germany, Austria, Switzerland, UK & Ireland, Netherlands, Spain

You can download the full HR study here.

Differing Perceptions: Comparing HR & Employees

The pandemic not only changed how companies operate, but where they operate. Between one-third and one-half of employees, in each country surveyed, worked from home at some point in 2020. 

But, how employees felt about the support they received from their employer differed significantly. This is true both of how employees experienced it, and how HR perceived that same experience.

How well did employers assist with the following?

TopicHR Assessment*
Employee Assessment*
Mental/Physical WellbeingGood: 69%Good: 47%
OnboardingGood: 58%Good: 40%
Childcare SupportGood: 57%Good: 33%

*Average values DACH, UK & Ireland, Spain, Netherlands

HR managers, those who are often very close to employees, are surprisingly misaligned in their collective view of the situation. In this sense, it would seem that important topics are at risk of slipping through the cracks at many companies — with very real consequences…

The Pandemic as a Catalyst for Change

Meanwhile, more and more employees are up for a change in jobs. Between 38% (UK & Ireland) and 46% (Netherlands) of employees surveyed said they would be open to a new job in the next six to twelve months – at the latest when the economy has recovered.

Costly layoffs during the pandemic.

Forty-five percent of HR decision-makers surveyed say their turnover rates have increased during the pandemic. Companies in the UK and Ireland have already incurred additional layoffs at a cost of around £2.9 billion (equivalent to just under €3.3 billion).

Culture-Related Reasons for Termination Falling Through the Cracks

Simply put, HR decision-makers and employees are split on why employees are quitting at this point in time. Many HR managers across Europe suspect that leave of absence, short-time work, or salary cuts are the main cause. 

But, what they underestimate are the factors specific to culture playing into employees’ thinking. This includes lack of recognition on the job: 23% of employees see this as a reason for quitting — for HR, this reason falls through the cracks at only 12%.

The top three reasons for termination (suspected and real)

Reason For TerminationHR Assessment*
Reason For TerminationEmployee Assessment*
Deteriorated work-life balance22%Fewer career opportunities31%
Short-time work and layoffs21%Deteriorated work-life balance24%
Salary freezes or reductions19%Little recognition on the job21%

*Average values DACH, UK & Ireland, Spain, Netherlands

HR decision-makers also rated the promotion of career development in their companies as “good” significantly more often (68%) than employees did (43%). 

Across countries, HR overestimated just how well culture, team spirit, and motivation were handled by employers. 

Seventy percent rated their handling of these issues as “good.” Employees countered with 47% — quickly bringing HR’s figure down to earth.

Productivity on the Downswing

Unsurprisingly, the pandemic had an outsized impact on productivity levels in European companies. The striking part, though, is that HR managers in every country overestimated how productive their employees truly felt. 

An assessment of productivity during the pandemic

 HR Managers*Employees*
More Productive55%39%
Unproductive30%29%
No Change15%32%

*Average values DACH, UK & Ireland, Spain, Netherlands

In the UK and Ireland, HR managers overestimated productivity levels by as much as 21% (HR: 52% vs. employees: 31%).

This suggests that HR, in its role as firefighter, lacked the time in recent months to take an in-depth look into the needs of employees.

In fact, 22% of HR employees complain that they are overloaded with administrative tasks. Eighteen percent lack the time and resources for strategic work to take place.

 29% of employees say their productivity has declined in the last 12 months. But, when it comes to addressing such strategic issues, many HR departments don’t have the time.

Productivity Lost: Poor Culture & Software Chaos

Decreased motivation (25%), poor mental and/or physical wellbeing (22%), and burnout (21%) — these are all the things employees see as the biggest obstacles to truly productive work. 

Unsurprisingly, each of these issues can be symptomatic of a dysfunctional corporate culture. 

Considering that 83% of employees feel inspired by a strong corporate culture, the solution for HR is obvious: strategic HR work needs to come back into focus.

Free Download: Our Guide To Corporate Culture

Corporate Culture Guide

Define goals, anchor values, measure corporate culture: In this practical guide, experts explain how to succeed.

Another glaring obstacle to productivity for employees is a collection of different tools and solutions in their daily work. Thirty-six percent say constantly jumping back and forth between different solutions disrupts their workflow. 

In fact, even the smallest interruptions, such as a tool change or notification, are enough to diminish productivity. Each “micro delay” costs a combined 20 minutes and creates a snowball effect, which can then be reflected in staff turnover.

Learn more in this article from our Director of Brand and Comms, Laura Schroeder.

Renewed Areas of Focus: 3 Strategies for HR

A lack of motivation, a feeling that they are neither valued enough nor getting ahead; Reasons like these are fueling employees’ willingness to change jobs in the post-pandemic world, threatening company productivity and coffers alike.

What’s more, a battered corporate culture is having a negative impact on employee productivity, overall. And, if that wasn’t enough, too many solutions add to the problem by slowing down work and harming productivity even further. 

That said, it’s not all doom and gloom: HR departments can address these three key issues to counteract rising turnover and plummeting productivity:

  • Set a clear focus on employees, culture, and HR strategy.
  • Free up time to address strategic issues, for example, by automating processes.
  • Design internal processes to avoid distractions, as is the case with a software landscape that is seamlessly aligned.

In short, our latest HR study made one thing clear. After months of simply trying to keep our HR’s head above water, it’s time to adjust course and focus on your company’s most valuable resource: Your employees.

Discover Personio's
HR Software Today

Take A Tour