- 52% of leaders say short-term pressures are preventing strategic investment for the future and 54% are reluctant to invest in projects where ROI cannot be delivered within two years
- 70% anticipate they will need to re-skill more than half their current workforce in the next decade to remain competitive
- The top characteristics of a future-proof business are high adaptability to market change (41%), continuous skills renewal for new technology (36%), and being data-driven and technology-first (29%)
New research commissioned by MHR, the specialist provider of HR, payroll, and finance software, has found that UK organisations are being forced into short-term decision-making that is undermining their long-term strategy, talent retention and AI adoption. The research, conducted among 1,000 UK business decision-makers, reveals leaders are prioritising survival over investment and growth opportunities.
There is a growing strategic divide at the heart of British businesses as leaders recognise the need to become more agile, data-driven and people-focused, but many organisations remain constrained by immediate financial pressures, legacy technology and outdated planning models. Short-term economic pressures, such as rising operating costs and the impact of changes to employment rights, lead to cost-cutting, which more than half of leaders (55%) say is actively damaging their ability to attract and retain talent and is preventing strategic investment for the future (52%).
This is impacting investment in technology, with 54% saying they are reluctant to invest in projects where ROI cannot be delivered within two years and 37% naming uncertain ROI as one of the biggest barriers to AI adoption specifically. The findings reveal a further disconnect between the pace of AI adoption and organisational readiness. While 82% are already using, or actively planning to use, AI or automation within the next 12 months, 46% of business leaders say they’re worried their current IT infrastructure cannot support the next wave of AI.
This is creating a divide between ambition and execution and could negatively influence how businesses contribute to the UK economy, despite the government’s growth agenda.
Anton Roe, CEO at MHR said, “The modern business landscape requires agility to become a permanent feature of any organisation, rather than a passing trend. Businesses are expected to transform, innovate and adapt at speed, but as technology teams forge ahead with automation and AI deployment, HR, finance and payroll leaders are left to align workforce management, data and governance at the same pace. This is increasing organisational friction at a time when every business should be working from a shared vision of success.”
Talent strategy can no longer be separated from technology strategy, with business leaders recognising talent retention and upskilling as the top long-term success driver (39%). In fact, 80% believe continuous learning and upskilling is now essential to retention and 78% agree businesses must create clear pathways from automated roles into higher-value work.
Creating a culture of knowledge sharing is also important as 76% of leaders say that businesses must formally reward senior staff for mentoring and sharing institutional knowledge. Organisations must embed learning, development and upskilling into their core business strategy, and treat workforce management as the key to unlocking long-term growth.
Roe adds, “As managing business volatility becomes the norm, the traditional definition of ‘future-proofing’ an organisation is shifting, but a strong focus on nurturing and developing the right skills remains key. As the pace of business change accelerates, those organisations who prioritise learning and make it a core strategic priority will outrun their competitors. Organisations that neglect upskilling risk becoming nimble in theory but stuck in practice.”
