RoxAnne Thomas, director of transportation at Gerber Plumbing Fixtures, at their warehouse in Woodridge, IL on Thursday August 26, 2021. Photographer: Christopher Dilts/Bloomberg

Staff shortages and supply chain issues are piling increasing pressure on North West businesses, as the Government continues to grapple with the fallout from Brexit and the pandemic.

According to BDO’s latest Rethinking the Economy survey of 500 mid-sized businesses, nearly a third of regional companies (31%) admitted that staff shortages were significantly affecting their ability to operate at normal levels, with the same number citing unexpected delays from international suppliers.

The survey showed that a shortage of overseas workers, exacerbated by Brexit and the pandemic, was one of the biggest issues when recruiting staff, with 22% of mid-sized businesses stating that a lack of available talent in the region was also fuelling the problem.

As a result, an overwhelming 94% of respondents said they intended to reduce their product lines or services to help manage staff shortages, with 42% admitting they would have to act within the next month if the situation doesn’t change. Many businesses anticipate that this reduction in services will only be a temporary measure, with 39% of companies planning to hire graduates and apprentices in an attempt to plug the skills gap.

Ed Dwan, partner and head of BDO in the North West, said: “Much has been made of the desperate need for HGV drivers and the domino effect this is having downstream throughout the supply chain. However, the issue of staff shortages is not unique to the logistics sector. Many industries across the region are struggling to meet recruitment demands at the moment, with little sign of the problem abating in the short-term.

“COVID-19 and Brexit are two of the biggest contributors, but North West businesses are also experiencing issues at the lower end of the market, where they’re struggling to fill apprenticeship positions. The lack of available talent in the region is a real cause for concern and businesses are having to think creatively in order to circumnavigate this growing issue – whether that’s through increasing salaries, offering permanent remote or hybrid working, or introducing referral bonuses.”

The Rethinking the Economy survey showed that despite the issue of staff shortages, which is causing the biggest impact on regional businesses at the moment (36%), North West companies were still optimistic about the rate of recovery, with more than a third stating that it will take less than 12 months for the business to return to pre-pandemic revenues. As such, in the next three months, the key business priorities are growing revenues (39%), tackling higher operational costs (33%), and managing domestic supply chains (25%).

Dwan added: “Despite the considerable challenges being posed throughout the supply chain, North West businesses clearly have one eye on the future. Their confident and forward-looking approach makes them more open to growth, with the vast majority of regional leaders actively seeking additional capital over the next 12 to 18 months – 72% of which will be used to fund mergers and acquisitions. As we head into a difficult winter period, that desire and ambition should hold businesses in good stead to tackle the challenges in front of them.”


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