Economy

Recruitment crisis continues

British Chambers of Commerce Head of Economics Suren Thiru

The Coventry and Warwickshire Chamber of Commerce says companies are struggling to recruit after vacancies hit a national high.

The latest figures from the Office for National Statistics show that unemployment across the country dropped to 4.1 per cent between October and December, leaving it just a fraction higher than when Covid-19 first struck.

A new national record of 1.3 million job vacancies was set in the final quarter of the year, with employers expanding their search for skilled workers.

Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said: “The rate of unemployment hasn’t hit the heights that many were expecting and it is now virtually at pre-pandemic levels, which is positive news for the economy.

“However, we are seeing firms struggling to recruit the people they need to be able to grow their business.

“At a time of rising costs and supply chain headaches, businesses are being hit by a range of issues at a time when they want to focus their energies on growing and ensuring we build a sustainable economic recovery from the crisis of the past two years.”

British Chambers of Commerce Head of Economics SurenThiru said: “The increase in payroll employment in January suggests that Omicron had little effect on the UK labour market as demand for workers remained robust.

“While it is encouraging that payroll employment is rising and unemployment continues to fall, the strong headline figures mask significant underlying challenges.

“Record vacancies underscores the critical hiring crisis facing firms. With high economic inactivity indicating that many people have left the jobs market altogether, chronic staff shortages are likely to weigh on the UK economy for a sustained period.

“With regular pay growth slowing, inflation is comfortably outpacing wages, weakening household finances further. Despite recruitment difficulties, the damage being done to business cashflow from a myriad of cost pressures are limiting the extent to which wages can rise.

“While Omicron is having little impact on employment, the squeeze on firms’ finances from high inflation, soaring energy bills and the looming national insurance hike is likely to weaken job creation and further restrain pay growth in the coming months.

“The government must do more to help people access rapid retraining opportunities for in-demand jobs, including helping older workers to pivot to more sustainable jobs. Delaying the looming National Insurance rise would give firms the financial headroom to retain and recruit people.”

“At a time of rising costs and supply chain headaches, businesses are being hit by a range of issues at a time when they want to focus their energies on growing and ensuring we build a sustainable economic recovery from the crisis of the past two years.”

Don’t pass the burden of Covid to business, Government warned

Business leaders in Coventry and Warwickshire say firms across the region are eager for a return to ‘normal trading conditions’ but don’t want the burden of managing Covid-19 passed to them.

Prime Minister Boris Johnson has unveiled the Government’s ‘Living with Covid’ plan that includes removing the legal requirement to self-isolate following a positive test from February 24 and other measures such as removing the legal obligation for individuals to tell their employers when they are required to self-isolate.

The new plan also sees the end of free universal symptomatic and asymptomatic testing for the general public from April 1.

Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said: “Companies across Coventry and Warwickshire are eager to go back to pre-Covid trading conditions and have been for the past two years.

“This has been an incredibly difficult couple of years and firms want to be able to push on for growth.

“However, it’s clear that Covid hasn’t gone away and the burden shouldn’t now fall on businesses to manage the virus moving forward and it is, therefore, vital that Government works with business to shape new guidance.”

British Chambers of Commerce Co-Executive Director, Claire Walker, said: “Businesses will welcome the ambition of the Prime Minister, which inches us closer to pre-pandemic trading conditions. However, for many firms, this move will not be without its challenges and Government must not pass public health decisions on to the business community, who are not public health experts.

“Members continue to tell us that access to free testing is key to managing workplace sickness and maintaining consumer confidence. If the government is to remove this, companies must still be able to access tests on a cost-effective basis.

“We look forward to consulting with Government to help shape the new guidance for businesses that will be developed. It is critical that a variety of issues and scenarios be fully addressed by this. Businesses need clarity if they are to operate at maximum capacity, as well as keep consumers and employee’s confidence high.

“Businesses also need to understand how Government will respond to further variants of concern – or indeed a future pandemic – and what support would be put in place if new guidance or mandatory restrictions are introduced that have a negative impact on the economy.

“Firms will only truly be able to ‘Live with Covid’ when they are confident that a plan is in place for future outbreaks. Uncertainty will put a brake on investment and the shadow of the pandemic could continue to loom over our economy for some time to come.”

“Businesses will welcome the ambition of the Prime Minister, which inches us closer to pre-pandemic trading conditions. However, for many firms, this move will not be without its challenges and Government must not pass public health decisions on to the business community, who are not public health experts."

I can’t repay my bounce back loan…

…is one of the most common client problems we hear at the minute.

The availability and ease of obtaining government backed loans was immense. Nobody quite knew what the future held and so, as a precaution, many businesses applied for these.

Some of the benefits were: • No setup fees to pay (at least none that the borrower paid, the government sorted those out) • Interest rates were low • No formal application process or business plan to submit • You didn’t have to make the first repayment until 12 months later • No personal guarantees required

However it’s not always quite so easy when it comes to repaying the loans. In the 12 month period between getting the loan and having to repay it the funds may have been spent and the business may still not be generating surplus cash each month. Someone that borrowed £50k would be looking at repayments of just over £900 per month.

Thankfully some help is at hand. To ease the financial burden on those borrowers the government have allowed them to:

• Extend the loan period from 6 to 10 years • Seek a repayment holiday for up to 6 months (you can do this once) • Move to interest only repayments for a period up to 6 months (you can do this up to three times)

Borrowers should certainly contact their lender to discuss any support that might be available to them and lenders should be supportive of this approach.

Despite the generous repayment options, a bounce back loan may only be one part of the jigsaw of cash demands. There may be a number of other loans from multiple lenders without such attractive terms. There could also be VAT, rent or other debts that have accrued or been deferred. Ultimately there could be too many pieces of the jigsaw. Put simply, if you don’t have the cash, it is very difficult to repay the debts of the business.

We are speaking with many businesses about their debts, talking to them about their options and discussing a road map out of it.

If you know someone that might want to speak with us, even just to enquire about their options without a need to use us we would be happy to help. For a free, no obligation and in confidence discussion please contact John Rimmer at BRI Business Recovery and Insolvency on 02476 226839 or jrimmer@briuk.co.uk

Help needed with energy issue

The Chamber says small firms need help with rising energy costs – as well as individuals.

Chancellor Rishi Sunak has announced a Council Tax rebate for those living in homes that are bands A to D to help with the increase in the energy price cap.

But Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said businesses need support too.

He said: “When we speak to members about the issues that could stifle their growth and recovery from the past two years of Covid-19 restrictions, rising costs is a real cause for concern.

“The increase in energy bills is another headache for companies across the region, especially our smaller businesses.

“It’s right that individuals are supported at this time, but businesses need help too and, along with colleagues at the British Chambers of Commerce, we would also urge the Government to delay the rise in National Insurance.”

Hannah Essex, Co-Executive Director of the British Chambers of Commerce, said: “While assistance for households is welcome, businesses will be dismayed at the lack of support for those firms also struggling with their energy bills. Many have already been hit by steep rises, with further significant spikes expected as existing fixed tariff contracts come to an end in the coming months.

“Smaller firms are particularly exposed as they have neither the protections or financial support provided to households, nor do they have the negotiating power of larger businesses. “Without action, soaring energy bills will force many firms to raise prices further which will, in turn, fuel the cost-of-living crisis for consumers and further drive surging inflationary pressure. “The Government should expand the Chancellor’s rebate and clawback scheme for households to include small firms, as well as delay the impending National Insurance rise. These steps would give firms a better chance to weather the current storm without needing to pass costs through to consumers in the form of price rises.”

It can be a long road… trust us to pick you up. RECOVERY BUSINESS +

Whatever your circumstances, trust BRI to help you get your business back on its feet.

From business recovery to CVAs, administration, debt advice and more, our highly-qualified insolvency experts are dedicated to giving you the best advice.

Whatever your business financial concerns, talk to BRI –we can help you on your way to a healthier future. Our services: • Restructuring • Corporate Insolvency • Personal Insolvency

For a FREE, CONFIDENTIAL and NO OBLIGATION consultation Call now on 02476 226839