InsightsInsight - Brachers, Corporate, Banking and Finance, Employment Advice - POSTED: June 16 2022
Industry insights from Kent business leaders
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Brachers partnered with leading accountancy firm Kreston Reeves to host the Kent Business Forum Lunch at the region’s premier business expo, Business Vision LIVE 2022, last month (May 2022).
The lunch was attended by a range of business leaders from across the county, with the aim of discussing and sharing ideas, identifying common pain points, and recognising particular business trends in the wake of both Brexit and the pandemic.
The lunch was hosted by BBC Breakfast reporter Ben Thompson, who challenged the business leaders to tackle three big issues and explore how best the challenges could be addressed.
It will probably come as no surprise that top of the agenda was recruitment, and the issue labour shortages across the majority of sectors, in addition to soaring inflation and managing continuing change.
In this article we explore in more depth these three issues that were discussed at the event.
People, recruitment, and ‘the great resignation’
For some time, the media have been reporting on ‘the great resignation’ triggered by COVID, where many have reflected on their working lives and have resigned in large seeking something different.
Whilst Kent employers on the whole have not experienced mass resignation, many employers are still seeing movement and shortages in the labour market, which are driving up wages.
A survey of business leaders at Business Vision LIVE found that 79% of businesses are currently struggling to fill job vacancies and 86% of businesses have increased wages to attract and keep staff. Wage increases are not insignificant with 82% facing a 25% increase in wage bills. The survey also found that 68% of businesses did not have any form of employee incentive programme.
The issue of recruitment and retention is something our Employment team and associated consultancy firm Kent HR, in particular, have been seeing for some time with clients they work with. Indeed, it was the catalyst for our recent ‘Answering the recruitment challenge’ webinar series, where we invited specialist guest speakers to join us to discuss topics such as getting creative with contracts, the benefits of graduate employment, and talent acquisition.
This issue was also covered in more depth in our recent insight piece, the recruitment pinch.
Head of the firm’s Employment and HR team, Catherine Daw, commented: “Whilst many employers are facing challenges, there are some positive steps with a number of Kent’s employers focussing on developing opportunities for existing staff and having structured development plans.
“In our experience incentives can offer a short-term benefit but long-term retention comes from shared values and clear opportunities for employee development and progression.”
Inflation is at its highest level for over four decades and is predicted to increase further. Rapidly increasing energy costs and conflict in Ukraine are largely to blame, with constrained supply chains adding further challenges. In October the cost of living is set to increase further, with Scottish Power’s Keith Anderson using the term ‘horrific’ to describe what is to come later in the year.
The survey of business leaders at the event found that 92% of businesses are currently facing increased costs, with 82% reporting increases of up to 25%. Nearly two thirds of those surveyed intend to pass on those increased costs to their customers. This will continue to push the cost of living and the rate of inflation until costs stabilise.
A concern is the inevitable impact this is expected to have on profitability. Three quarters of the businesses surveyed expect profitability to fall, with 64% expecting profits to be up to 25% lower this year.
Many business leaders have proven adept at managing change in the face of the global pandemic, and having to pivot and adapt their service offering at often very short notice.
One aspect of change that will continue for the foreseeable future is the widespread adoption of hybrid working patterns. 75% of businesses who were surveyed are operating hybrid working arrangements with just 21% fully in the office or workplace.
Whilst certain politicians fear the impact hybrid working might have on productivity, just over a fifth (21%) of Kent business leaders surveyed at the event actually reported increased productivity. Of those surveyed, 36% said it has stayed the same, and an equal number feel hybrid working has reduced productivity.
At Brachers, hybrid and flexible working has been on the agenda for some time, and our foresight in a significant IT transformation project pre-COVID successfully enabled us to seamlessly transition over 200 staff to full-time remote working in March 2020, when the first national lockdown was announced, with no disruption to client service. Flexible and hybrid working remains an important part of how the firm currently functions, and has been warmly received by both staff and clients.
The productivity of the UK workforce has vexed economists and business leaders for decades and looks likely to do so for many years to come.
James Bullock, Partner and Head of Brachers’ Corporate and Commercial team commented: “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 who attended the lunch discussion were all of the view that their businesses are robust and will emerge stronger from the challenging times ahead.”
However, how the issue of hybrid working practises feeds into the county’s office market is perhaps a little unexpected. Almost a third (29%) report an expected increase to their office footprint in the next 12 months, with just 11% saying they will look to downsize on office space.
Commercial Property Partners Lee May and Ash Jilani explore in more depth their predictions for changes in commercial property use.
Businesses must rethink and recalibrate to shape their future, but they don’t have to do this alone.
As well as having a deep understanding of legal complexities and regulations, we look at the broader picture and can identify the wider commercial issues affecting you, and provide guidance to support you in this difficult climate.
For an informal chat about your requirements on any of the issues covered in this piece, please get in touch via the contact form on this page.
This content is correct at time of publication
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