Staff shortages and supply chain issues pile pressure on businesses - report
Staff shortages and supply chain issues are piling increasing pressure on Midlands businesses as the Government continues to grapple with the fallout from Brexit and the pandemic, according to a survey from BDO LLP.
BDO 's latest 'Rethinking the Economy ' survey gained insight from 500 mid-sized businesses and found that nearly a third of regional companies (30 per cent) admitted that staff shortages were significantly affecting their ability to operate at normal levels, with more than a quarter (26 per cent) citing unexpected delays from international suppliers.
The survey showed that a shortage of overseas workers, exacerbated by the pandemic, was one of the biggest issues when recruiting staff, with 39 per cent of mid-sized businesses stating that a lack of available talent in the region was also fuelling the problem.
As a result, an overwhelming 90 per cent of respondents said they intended to reduce their product lines or services to help manage staff shortages, with more than a third (35 per cent) already having done so.
Many businesses anticipate that this reduction in services will be a long-term change, with 33 per cent of companies planning to retrain existing staff to help fill vacant roles.
Tim Foster, partner at BDO in the Midlands, said: “While the media spotlight has understandably been shining on the lack of HGV drivers, and the knock-on effect this is having on the supply chain, there are many sectors within the region that are facing their own uphill battle to recruit and retain staff at the moment.
“COVID-19 and Brexit are two of the biggest contributors, but Midlands businesses are also experiencing issues at the lower end of the market, where they 're struggling to fill both apprenticeship and entry level positions.
“The lack of available talent in the region is a real cause for concern and businesses are having to think creatively in order to circumnavigate this growing issue - whether that 's through retraining, enhanced incentives, or new recruitment strategies. ”
The Rethinking the Economy survey showed that despite the issue of staff shortages, which is causing the biggest impact on regional businesses currently, Midlands companies were still optimistic about the rate of recovery, with more than a third stating that it will take less than 12 months for the business to return to pre-pandemic revenues.
As such, in the next three months, the key business priorities are managing cash flow, growing revenues and managing domestic supply chains.
Foster added: “It 's reassuring to see that regional businesses are keeping a firm eye on recovery, despite the considerable challenges being posed throughout the supply chain. The adoption of a more confident and forward-looking approach is clearly boosting the investment intentions of businesses, with the vast majority of regional leaders actively seeking additional capital over the next 12 to 18 months - more than half of which will be used to fund mergers and acquisitions. That appetite and ambition will be crucial for businesses as we navigate what will almost certainly be a difficult few months ahead. ”