The logical way out of a seeming ‘permacrisis’
MANY businesses across Birmingham and the region say the cost-of-living crisis is having a greater operational impact than Covid.
As rising costs and inflation eat into profits, it’s set to be another tough winter across supply chains.
The combined effects of the pandemic and Brexit, alongside recent difficulties triggered by Ukraine, continue to destabilise the commercial equilibrium that companies of all sizes seek to achieve.
What makes this period interesting is the intensity and frequency of the challenges that businesses continue to face.
It’s hardly surprising the word ‘permacrisis’ – ‘an extended period of instability and insecurity’ – is the 2022 word of the year.
Some believe constant change pushes firms to innovate and thrive while others feel it is detrimental to longer-term economic stability and sustained growth.
Whatever your view, the biggest concern now – aside from the predicted recession – is that firms must not forget about learning and development because they are so intent on survival.
Those which fail to make the link between business resilience and high-performing teams will struggle to adapt in these unprecedented times.
Embracing uncertainty and creating a learning culture is the only sustainable response to ongoing economic challenges faced.
Individuals who have been nurtured professionally often provide the best ideas to respond to changing market conditions.
Empowering the team and giving them the space to grow is key to a firm’s propensity to weather the economic storm.
Here in the West Midlands, 25 per cent of all vacancies are skillsshortage vacancies – higher than the national average of 22 per cent.
The problem is most acute in manufacturing, construction, information and communications technology, business services and education.
Logistics also faces challenges nationally, with 79 per cent of operators reporting vacancies.
That’s why many leading firms have got behind Generation Logistics which is a government-backed initiative which highlights the skilled, complex nature of the UK’s interconnected industry.
This campaign also counteracts the impact of Brexit and Covid which saw the loss of valuable EU labour to
a tightening UK labour market.
The Truss administration planned to tackle this by reinstating seasonal unskilled EU workers, it remains unclear whether Sunak will progress this.
The recruitment struggles that employers across the West Midlands face have reached a record high but unemployment and claimant levels across the region are at their lowest level since 1974, with 2.85 million people in work.
Yet, the inability of firms to find skilled staff to operate at full capacity continues to hamper economic growth.
This juxtaposition has also been exacerbated by more people leaving the labour market since Covid which triggered a work-life balance reassessment.
We’re finding widespread talent shortages have to be tackled differently.
In addition to prioritising team
development, it’s also been crucial to set out the culture and values within which we operate to lower turnover by driving more positive connections.
It’s encouraging that other firms are doing the same, with research showing 41 per cent see the upskilling of staff as the optimum response to recent challenges, with 35 per cent planning a focus on flexible working to promote their wellbeing propositions.
Steps like this are particularly important for
West Midlands’ businesses because the region is already lagging behind the UK average in working age qualifications.
So too are apprenticeships. These help to close the skills gap and prevent economic stagnation, allowing the talent pool to expand by training people with the right work ethic. The Pay Apprenticeship Levy and grant incentives for large and small firms respectively both offer a route through which funding can be accessed for learning and development.
Although some consider these an over-bureaucratic tax burden, others recognise it as a drawdown investment in training.
Whatever your view, it’s vital that businesses don’t rely solely on the Government to incentivise learning and development.
As public sector budgets continue to be squeezed, firms need to prioritise their own investment while also backing campaigns like Generation Logistics or the Ladder for Greater Birmingham to alleviate workforce pressures.
UK logistics contributes £127 billion to the country’s economy and employs 2.6 million workers of which ten per cent are in the West Midlands. Industry global growth is projected to rise by 4.9 cent in 2026.
Logistics is here to stay and must be seen as offering a skills pathway to a career that’s fit for the future.
The inability of firms to find skilled staff to operate at full capacity continues to hamper economic growth