NW Businesses Focus On People Strategies While Grappling With Supply Chain And Inflation Woes
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Nearly half (47%) of mid-sized businesses in the North West said supply chain issues are the biggest threat to business success over the next six months and 35% are most concerned about the record levels of inflation, according to new research by accountancy and business advisory firm, BDO.
The bi-monthly Rethinking the Economy survey of 500 leaders of medium-sized businesses found 29% of businesses in the region are planning to grow their workforce currently, but face challenges in doing so with 24% struggling to find talent with the right skills. One in three businesses are increasing starting salary offers and a third are offering more workplace benefits because of greater competition for talent.
As businesses seek to support staff through the cost of living crisis over the next six months, 59% of companies in the region plan to raise salaries by 4-8% and a further 26% will consider pay hikes of 9% or over in line with current inflation rates. Aside from changes to salary, 56% will offer one-off bonuses and half of businesses will offer benefits in kind, such as shopping vouchers, childcare support, free travel or meals at work.
Angela Cross, head of tax at BDO in the North West, said:
“Businesses in the region continue to face extreme challenges from supply chain to rising energy costs and, as interest rates continue to rise, this is placing a real squeeze on company finances.
“Even with these dynamics, businesses are still expanding their talent pool and looking at ways to support employees and ensure a resilient workforce for the long-term. In fact, 71% of North West businesses told us they are very confident in the effectiveness of their pay and reward strategy regarding the retention and attraction of staff and the same amount have reviewed this recently.”
Against the backdrop of the huge demand for talent, 38% of businesses in the region have been forced to increase the prices of goods and services as they continue to face rising costs. Many (38%) say they are pausing international expansion plans in response to current issues, yet a third reported they will be looking for cheaper overseas suppliers as a cost-cutting measure.