Staff shortages and employee confidence threaten the growth of North West businesses   

Staff shortages may curb the growth of North West 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 more than a quarter citing recruitment and retention as one of the most significant barriers to growth. The survey showed that 40% of regional businesses are struggling to fill open roles, with 43% stating that they can’t find the right people with the appropriate skills.

In addition, more than a quarter (27%) of businesses reported that they have had to limit their services as a result of staff shortages. As a result, in the next six months 37% of North West companies plan to hire people to fill entry level roles, with nearly a third (30%) intending to capitalise on the Government’s Kickstart scheme.

Despite concerns from business leaders (33%) that employee confidence will also hamper growth, looking ahead nearly a third (33%) expect more remote and flexible working will help ease the skills gap, as businesses will have access to a wider talent pool

Angela Cross, Head of Tax in the North West at BDO LLP, said: “Staff and skills shortages are deep rooted issues across a number of key sectors in the North West, including technology and manufacturing. The coronavirus pandemic has accelerated that problem and crystalised the importance future talent will play in the region’s economic recovery.

“Despite the concerns over staffing and internal confidence, what is clear is that business leaders in the North West are still striving for growth – both through investment in their people and business, with an overwhelming 87% of mid-sized companies stating that now is the right time to invest. However, this sense of optimism is tempered with nearly a third (30%) saying that it will take between one and three years to return to pre-COVID revenues.”

As restrictions lift, there are still challenges ahead for North West businesses. 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 (33%), with the same number of people also stating that higher operational concerns must be addressed.

Cross added: “With regional cases of the Delta variant remaining high, and Government support measures beginning to wind down, companies are acutely aware of the external pressures facing the region.

“Unsurprisingly, all businesses said they were concerned about the potential impact of inflation, with 37% flagging the need to increase prices, while 27% of respondents said they would need to raise wages in line with higher inflation. 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.”