North West mid-sized businesses plan to embark on a major investment and hiring drive in 2021 to spearhead recovery.

REGIONAL SNAPSHOT

The North West consisting of the Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside counties, has shown continued resilience in the last six months. However, there’s little doubt that the North West region is still facing challenges posed by the pandemic, while having to address other concerns, such as the regulatory demands brought on by the EU/UK trade agreement and the ongoing issue of trying to access the right talent in the region. As offices are reopening, business leaders in the region are making, or planning to make, significant changes to the working environment in a bid to recover from the effects of the global pandemic.

BDO RESEARCH HIGHLIGHTS

Our latest Rethinking the Economy survey, found that current staff shortages may curb the growth of North West businesses, as mid-sized companies struggle to fill roles as a result of the pandemic. More than a quarter of mid-sized businesses in the North West cite recruitment and retention issues as one of their biggest barriers to growth, with 40% struggling to fill open roles and 43% stating that they can’t find the right people with the appropriate skills.

Worryingly, more than a quarter (27%) of businesses reported that they have had to limit their services as a result of staff shortages. However, in the next six months 37% of North West companies plan to hire people to fill entry level roles, with nearly a third (30%) intending to capitalise on the Government’s Kickstart scheme.

Despite the concerns over staffing business leaders in the North West are still striving for growth – both through investment in their people and business, with an overwhelming 87% of mid-sized companies stating that now is the right time to invest. However, this sense of optimism is tempered with nearly a third (30%) saying that it will take between one and three years to return to pre-COVID revenues which has increased from our previous survey in May 2021 when it was expected to be just a year.

The immediate priorities for North West business owners for the next three months is to continue to manage the impact of the pandemic as well as higher operational costs. Unsurprisingly, all businesses from the July survey said they were concerned about the potential impact of inflation, with 37% flagging that they will need to increase prices, while 27% of respondents said they would need to raise wages in line with higher inflation in the next six months.

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