Staff shortages could curb future growth says report

A new report put together by accountants and business advisers BDO claims that staff shortages caused by the pandemic could hold back the growth of some firms in the region.

The firm’s latest Rethinking the Economy survey, which saw 500 mid-sized companies take part, found that staffing was the biggest concern among regional business leaders, with more than a quarter (28%) citing recruitment as the most significant barrier to growth.

The survey showed that 52% of businesses were struggling to fill open roles, with 28% saying they cannot find the right people with the appropriate skills.

Despite concerns from business leaders (26%) that customer confidence will also hamper growth, looking ahead, nearly a third (32%) expected that more remote and flexible working will help ease the skills gap.

Tim Foster, partner at BDO in the Midlands, said: “The region has had to contend with staff and skills shortages for many years, particularly across traditional sectors, such as manufacturing and engineering.

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“The coronavirus pandemic has undoubtedly accelerated the problem and crystalized the importance future talent will play in the region’s economic recovery.

“Despite the concerns over staffing and customer confidence, what is clear is that business leaders in the Midlands still have a firm focus on growth – both through investment in their people and business, with the majority of mid-sized companies (67%) stating that now is the right time to invest.

“However, this sense of optimism is tempered with nearly a third (32%) saying that it will take between one and three years to return to pre-Covid revenues.”

The Rethinking the Economy survey showed that the most immediate priorities for businesses in the next three months are managing the ongoing impact of Covid-19 restrictions (28%), with 26% of people also stating that growing revenues is also key.

Mr Foster said: “There are many competing factors that are continuing to add substantial pressure on regional businesses post-lockdown.

“Unsurprisingly, all businesses said they were concerned about the potential impact of inflation, with 16% saying they would need to raise wages in line with a higher rate, while 24% of respondents said that making job cuts as a result of increasing costs was still a real prospect.

“It’s clear that despite entering the final and ‘irreversible’ stage of the Government’s roadmap out of lockdown, the regional economy still faces considerable challenges over the coming months.”