This trend will hurt you if you don't watch out for it

01st September 2021

I was speaking to the owner of a beauty salon, who was trying to hire an aesthetician.

“Even if I set up interviews with them, they don’t turn up,” she told me miserably. “I can’t get staff for love nor money right now.” I’m hearing the same for many business owners across a range of industries.

And this is backed up by press reports, which show that the hospitality, manufacturing, construction and food industries are suffering from the worst staff shortages since 1997.

It’s both because of the pandemic and Brexit. Many EU workers are returning home and there is a lack of lorry drivers who are able to come to the UK.

Meanwhile, workers are being forced to self-isolate - exacerbating the problem.

And one issue that’s barely being mentioned? Throughout the pandemic, people lucky enough to keep their jobs have tended to sit tight. Now that things have calmed down somewhat, it seems likely that many people will look to make a change - from the c-suite downwards.

It’s a very volatile labour market right now.

And this may have big implications for your business.

If you’re looking to hire right now, you may not be able to find the people you need so easily.

Even if you do, you may have to pay them a lot more than you would have done even a few months ago. When everyone’s trying to hire at the same time, your employees have more negotiating power.

You may not even be able to hold onto the staff you already have.

At one of the railways I’m involved in, our chef was recently poached by another employer who doubled his salary - which was generous to begin with!

So if staff shortages are beginning to affect you, it’s time to stop - and take stock.

You’ll need to reconsider your payroll bill. Are you going to be forced to increase it?

What are you going to do if you can’t fill essential roles later this year? You may even have to reconsider your business model.

If your payroll expenses are rising and you can’t afford it, could you restructure in some way? Is there a different way of working that would help you control this expense?

If you suspect you’re going to be impacted by this concerning trend, you simply cannot “just wait and see what happens” or “work it out later.”

Get it wrong, and your business can end up in serious trouble.

You might struggle to function smoothly without the staff you need. And if your payroll expenses rise dramatically, it could severely hurt your profitability and even the viability of your business.

Thinking through these issues is what responsible, grown up businesses do.

It’s what good financial management is all about.

And it’s exactly the kind of thing we help our clients with, so that they can plan their finances effectively, maximise their profitability and grow even faster.

If that’s the kind of financial help you want, hit ‘reply’ to this blog or call us on 01279 647 447 to get in touch today. I’ll get right back to you.

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