Staff shortages and investor confidence threaten the growth of South East businesses
3rd September 2021
- Nearly a third of mid-sized businesses in the South East cite recruitment and retention issues as one of their biggest barriers to growth, with 58% struggling to fill open roles
- However, 42% of mid-sized firms plan to grow their workforce in the next 3-6 months, compared to what it was pre-pandemic
- An overwhelming 94% of mid-sized companies in the region also believe now is the time to invest in their business.
Staff shortages may curb the growth of South East businesses, as mid-sized companies struggle to fill roles as a result of the pandemic.
According to BDO’s latest Rethinking the Economy survey of 500 mid-sized companies, staffing is the biggest concern amongst regional business leaders, with nearly a third (33%) citing recruitment and retention as one of the most significant barriers to growth. The survey showed that 58% of regional businesses are struggling to fill open roles, with the same number of respondents stating that they can’t find the right people with the appropriate skills.
In the next six months 36% of South East companies intend to capitalise on the Government’s Kickstart scheme, with more than quarter (28%) planning to hire experienced people in senior positions.
Despite concerns from business leaders (39%) that investor confidence will also hamper growth, looking ahead nearly a third (30%) expect more remote and flexible working will help ‘level-up’ towns and cities outside of London.
Anna Draper, lead partner in the South East at BDO LLP, said: “Staff and skills shortages continue to pose significant problems for businesses in the South East, particularly in key sectors such as manufacturing and agriculture. The coronavirus pandemic has accelerated that problem and crystalised the importance of attracting the right talent as part of the region’s economic recovery.
“Despite the concerns over staffing and investor confidence, what is clear is that business leaders in the South East are focused on achieving growth – both through investment in their people and business, with an overwhelming 94% of mid-sized companies stating that now is the right time to invest. This sense of optimism is mirrored in the rate of recovery, with more than a third (39%) saying that it will take between three and six months to return to pre-COVID revenues – the quickest rate of any UK region.”
As restrictions lift, there are still challenges ahead for South East businesses. The Rethinking the Economy survey showed that the most immediate priorities for businesses in the next three months are managing international supply chains in line with the EU/UK Trade Agreement (36%), with 33% of people also stating that restructuring workforces, including making redundancies, was a consideration.
Draper added: “Companies are acutely aware of the external pressures facing the region, with the threat to jobs and the added complications of Brexit still posing significant problems.
“Unsurprisingly, 94% of businesses said they were concerned about the potential impact of inflation, with 22% flagging the need to increase prices, while 19% of respondents said they would need to delay growth plans until prices became steadier. It’s clear that despite entering the final and ‘irreversible’ stage of the Government’s roadmap out of lockdown, the regional economic landscape remains both testing and complex as businesses attempt to navigate the next few months.”
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