As risk managers gathered in Brighton at the AIRMIC conference the UIK’s mid-sized firms said they were buckling under the lack of staff and supplies.
Accountancy and advisory firm BDO, released the results of a study with over 500 mid-sized firms which found over a quarter (26%) said staff shortages are putting the most pressure on their ability to operate at normal levels. The UK’s mid-tier is the UK’s economic heartland, representing one in four jobs across the economy.
More than a quarter of all businesses also say that reduced stock caused by supply chain disruption is putting pressure on their operations.
Ed Dwan, partner at BDO, said: “Brexit, global supply chain issues and the long tail of Covid-19 has created a perfect storm for UK businesses. After navigating the challenges of the pandemic and hoping for some respite, businesses have found themselves facing more major disruption, with those across almost all sectors reporting staff shortages.
“This is an era of upheaval, and the challenges faced by the UK’s mid-tier – the engine of the UK’s economy – points to a long road ahead.”
BDO added the knock-on impact on consumers is likely to be significant. Over a third of businesses (34%) have reduced product lines and services on offer, with a further 30% planning to do the same this month unless the situation radically improves. Nearly a third (29%) of all businesses expect these reductions to be long-term.
On top of this, almost a third (29%) of businesses surveyed say pricing of their products or services will need to increase in the next three to six months.
“Businesses believe staff shortages are being caused by a number of market factors,” stated the study. “A third cite their top issue as a shortage of overseas workers created or exacerbated by the pandemic, while 31% blame Brexit for their shortage. Whilst a lack of overseas talent is clearly having an impact, 38% see their top recruitment challenge as unavailability of talent in their region.”
As staff shortages continue, the war for workers is intensifying. Nearly a fifth (19%) report increasing wages to attract new joiners, which could have a knock-on effect on already high levels of inflation. Other methods include introducing perks to make an employer more attractive to candidates (29%) and a similar number are trying new recruitment strategies.