Stock shortages and supply chain issues are piling increasing pressure on Yorkshire 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, more than a third of regional companies (37 per cent) admitted that unexpected delays from domestic suppliers were significantly affecting their ability to operate at normal levels, with 30 per cent citing low stock levels and nearly a fifth blaming staff shortages.
The survey showed that a lack of overseas workers, exacerbated by the pandemic, was the biggest issues when recruiting staff, with 40% of mid-sized businesses stating that talent and skills issues in the region were also fuelling the problem.
As a result, all respondents said they intended to reduce their product lines or services to help manage staff shortages, with 47 per cent 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 40 per cent of companies exploring incentive schemes, such as referral bonuses, to help plug the skills gaps.
Terry Jones, partner and head of BDO in Yorkshire and the North East, said:“While the media spotlight has understandably been shining on the lack of HGV drivers, and the knock-on effect this is having on the supply chain, there are many sectors within the region that are facing their own uphill battle to recruit and retain staff at the moment.
“COVID-19 and Brexit are two of the biggest contributors, but Yorkshire 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 and skills within 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 retraining, enhanced incentives, or new recruitment strategies.”
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 (33 per cent), Yorkshire companies were still optimistic about the rate of recovery, with 40 per cent 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 managing international supply chains (43 per cent), making loan repayments (27 per cent), and growing revenues (23 per cent).
Mr Jones added: “It’s reassuring to see that regional businesses are keeping a firm eye on recovery, despite the considerable challenges being posed throughout the supply chain.
“The adoption of a more confident and forward-looking approach is clearly boosting the investment intentions of businesses, with the vast majority of regional leaders actively seeking additional capital over the next 12 to 18 months – 67 per cent of which will be used to fund mergers and acquisitions. That appetite and ambition will be crucial for businesses as we navigate what will almost certainly be a difficult few months ahead.”