75% of Kent businesses expect profitability to fall as they are hit by increased costs and rising inflation

A survey conducted by Brachers and leading accountancy firm, Kreston Reeves, at Business Vision LIVE 2022 found that 82% of business leaders reported cost increases of up to 25%. 

The survey of business leaders also found that:

• 75% of businesses are expecting to see profits fall, with 64% expecting profits to be up to 25% lower this year
• 96% of businesses are facing increased costs, with 82% of businesses reporting increases of up to 25%
• 86% of businesses have increased wages to attract and keep staff
• 82% are facing an increased wage bill of up to 25%

Now in its 15th year, Business Vision LIVE is Kent’s largest business exhibition with over 200 exhibitors and 25 workshops and conference sessions.

Brachers and Kreston Reeves hosted the Kent Business Forum Lunch at the exhibition chaired by BBC Reporter, Ben Thompson, inviting a cross sector group of regional business leaders to discuss the most challenging issues their businesses are facing.

The survey also found:

• 79% of businesses are struggling to fill job vacancies
• 68% of businesses do not have any form of staff incentive scheme
• 75% of businesses are operating hybrid working arrangements with just 21% fully in the office or workplace
• 57% of businesses say hybrid working has either improved (21%) or maintained the same levels (36%) of productivity. 36% feel hybrid working has reduced productivity, with 7% selecting NA
• 89% of businesses say their property footprint will remain the same (60%) or increase (29%) in the next 12 months. Just 11% say they will look to reduce their office footprint

James Bullock, Partner and Head of Corporate and Commercial at Brachers, said: “The labour market in Kent has always been challenging for businesses. The proximity to London matched with increasing hybrid working patterns has added further pressure. But on a positive note, the business leaders were all of the view that their businesses are robust and will emerge stronger from the challenging times ahead.

“Our survey is telling in that well over half of businesses do not have any form of financial incentive programme. Schemes that allow employees to share in the success of a business are a simple and tax-efficient way to incentivise, retain and attract new staff.”

Andrew Griggs, Senior Partner at Kreston Reeves, said: “Businesses continue to face extraordinary challenges. Increasing costs and higher wages, driven by high inflation, will have a detrimental effect on cashflow and profitability and business leaders need to prepare for that.

“Businesses with a strong purpose that put people and profit on an equal footing, investing and building for tomorrow, are likely to emerge from this current economic cycle in a strong position ready to capitalise on future growth.”

Businesses must rethink and recalibrate to shape their future, but they don’t have to do this alone. Brachers and Kreston Reeves work alongside many businesses facing these issues. If you would like guidance on any of these issues, please get in touch.

This content is correct at time of publication