See the big picture
While there certainly will be challenges ahead I think there will also be opportunities, particularly for businesses in the region that have well-articulated strategies focused on people (attraction, retention and development) and sustainability, along with a curious mindset regarding how emerging technologies could support their ambitions.
Head of Mid-Corporate South, Barclays Corporate Banking
Based on my conversations with clients, the availability of staff continues to be a primary concern, particularly for businesses in the technology, healthcare, and hospitality and leisure sectors, and those based in large business hubs such Southampton, Reading, Bristol, Guildford, as well as on the South Coast.
The high cost of living and rising property prices appear to be adding to the challenges associated with attracting and retaining talent in the southeast of the region, while some of the more remote areas across the South are also finding it harder to recruit given their relatively poor transport connectivity.
The skills shortage is unlikely to be alleviated any time soon, so over the coming year I expect to see more businesses explore new ways to recruit and retain the talent they need to succeed.
Dealing with rising costs
Although inflation is not as high as it’s been in recent years, businesses will still need to manage rising costs this year, some of which include increases to the minimum wage and employers’ NICs announced in the Autumn Budget.
Regulatory costs are also likely to increase – for example, sustainability requirements are starting to trickle down to businesses across supply chains, and these are expected to become vital to securing contracts. Certain sectors will also need to deal with unique cost challenges, such as the impact of VAT being applied to independent schools’ fees.
Some of our clients say they will have to pass on a proportion of these costs to consumers, although this is further complicated by the ways in which consumer behaviour is changing. For example, in the hospitality and leisure sector, consumers may choose to dine out less frequently, go for cheaper options, or shorten their holidays. As such, businesses may need to find new ways to offer value and build customer loyalty.
Navigating infrastructure challenges
Traffic congestion, aging infrastructure, and a lack of public transport and connectivity between certain areas continue to persist across the South, all of which have the potential to hinder growth and operational efficiencies for businesses.
Although various projects, such as the upgrade to the A30 and the Elizabeth line to Reading, promise significant improvements for those specific areas, additional development in the wider region is required to promote business growth. While flexible work arrangements can help to some extent, this is of course not possible for all sectors, so businesses may need to explore innovative ways to overcome these hurdles.
I’m seeing growing demand from clients for funding to support growth, particularly within the technology, life sciences and green energy sectors. As always, we’re committed to helping businesses across the South access the finance they need through our range of lending solutions.
Head of Mid-Corporate South, Barclays Corporate Banking
Businesses may need to adopt a consistently ‘curious’ mindset to explore how emerging technologies could help them address some of the challenges associated with the skills gap and rising costs.
To be better placed to retain top talent, businesses may want to focus on their learning and development programmes, hybrid working models, and workplace environments.
Growing regulatory requirements mean that having a solid sustainability strategy is becoming less of a choice and more of a necessity for businesses of all types and sizes.
If you’re looking to unlock growth opportunities to move your business forward, our £22bn Business Prosperity Fund is available through some of our borrowing and refinancing options. See how we could work together to achieve your ambitions and strengthen the UK economy. Subject to normal lending assessment, status and application. Terms and conditions apply.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
To discuss your business requirements and how Barclays can support you, contact us today.
