December 7, 2022
Let’s be frank: this year has been a challenge. From the cost of living crisis to international war, it’s fair to say, it hasn’t been easy. For directors tasked with steering companies through uncertain waters, it has been a complex juggling act. As we prepare for a fresh slate in 2023, many are wondering… what lies in wait?
What reprieves can we expect? What problems do we anticipate? And what issues lie ahead for directors in 2023?
We’ve got you covered. In this article, we count down the top 5 issues looming in 2023 and how to tackle them.
To kick off this list, we had to begin with one of the most prevalent issues facing directors: the people problem. Headlines have been dominated with reports of a talent crisis, waves of redundancies, a collapse of morale, and overall - a tough time for employers and employees alike.
But what issues can we anticipate dominating 2023?
This year we witnessed the great resignation, the rise of quiet-quitting, and the continuation of the ever-increasing war for talent. So much so, that in May 2022, the UK reached a record high of 1.3 million vacancies. Add to that the fact that 87% of companies are aware they have a skills gap, and you get the scale of the issue. While many businesses are being forced to downsize, the fact remains that recruitment is a lengthy, costly, and challenging process.
The challenge of that process has been amplified, as Gen Z slowly but surely reshape the working landscape. Modern workers now expect better remuneration, better flexibility, and better career prospects - meaning the most competitive of businesses are those that invest directly back into their staff.
For those that look to scale the talent crisis, we have a few top tips.
There are few things more off-putting for a potential employee than two fateful words “competitive salary”. More often than not, it forces an employee to begin the application process, with little understanding as to whether it can support their requirements, their lifestyle, or their dependents. Similarly, failure to clearly outline the role at hand can result in the loss of your hire not long after securing them. It costs an estimated 33% of an employee’s annual salary to replace them, so retention is key.
When it comes to staff, it can be tempting to fall for the “grass is always greener” adage. However, it’s crucial you invest in your existing staff, in addition to those you want to entice. Not only does it have a knock-on effect regards morale and loyalty, but your company directly benefits from the skill boost. Double whammy.
According to glassdoor, 76% of jobseekers felt a diverse workforce was an important factor when searching for a new role. Similarly, flexibility, career prospects, and training ranked highly when employees and jobseekers were asked to outline what matters to them in a new role. As companies wage the battle for talent, it’s key they holistically consider what they’re offering. Free fruit and a pool table just isn’t going to cut it anymore.
Amidst the talent crisis, many companies are also facing redundancy. So much so, that this year we witnessed waves of layoffs in the tech industry, from Meta to WhatsApp, to Twitter.
Many reports indicate that we can expect redundancies to hit UK industries at large in 2023, leaving many directors facing the complex challenge of motivating existing staff, while restructuring teams to hunker down. Not only that, but directors will need to rally remaining troops without blurring the lines between motivation and burnout.
Recent years have witnessed the rise of remote and hybrid working. So much so, that the phrase “remote jobs” has seen a 410% increase over the last 5 years. However, as COVID-19 restrictions have relaxed, many workers have been returning to the office. But is that best for the people, and best for the business?
As businesses head into 2023, many directors are reassessing the pros and cons of the remote/hybrid working model. While the new mode of working allows for greater flexibility, and oftentimes, greater productivity, reports have increased surrounding loneliness, decreased collaboration, and depleted motivation for those working remotely.
As the new year looms, many directors will be tasked with the question: is remote/hybrid working here to stay? Or is it time for another shake-up?
For those that embrace remote working, another new phrase has begun to rear its head, “employee monitoring”. For many, monitoring is simply used to track the welfare and productivity of teams, however, in some cases, its uses extend far beyond its initial intentions.
This year, the cost of living crisis well and truly took hold. UK energy bills reached record levels, interest rates rose to a 33-year high, and many businesses were forced to shutter their doors. In 2023, directors will need to wager a creative set of tactics to cope with inflation…
As overheads and ongoing costs rise for businesses, profit margins increasingly shrink. So much so, that many businesses are being forced to raise their prices to maintain cash flow. And yet, the increase in price is often met with resistance, whether that’s from existing clients or potential new customers.
During a recession, cash is king. However, it’s a thinly spread resource at risk during a financial crunch. As businesses look to intelligently leverage their finances, many will be weighing up whether it’s time to invest in growth or initiate cost-cutting measures.
While each has its merits, it’s surprisingly easy to financially fumble in this regard. That’s why we spoke with finance experts from Edinger Consulting and GrowthBuilders to gain their insights on how to manage money during a downturn.
As cash flow slows down, it’s important that businesses investigate how processes can be improved. Investigating the length of time it takes to pay an invoice can be a particularly good place to start. Perhaps the most shared experience of modern businesses is the unfortunate reality that many clients will delay settling an invoice. In a crunch, however, that leaves a business notably exposed, chasing cash that should have been in the bank weeks ago.
In 2023, many directors are reinvestigating their payment terms. Are you?
Customer behaviour is undergoing a shift, not least due to the increased financial pressures that loom over the UK. And yet, those pressures don’t signal a halt to spending, but rather a keen focus on quality over quantity. With that in mind, many directors will need to return to the drawing board to address what’s working, what isn’t, and to tackle where the business can deliver value to fiscally cautious customers.
For those seeking investment in 2023, a unique environment awaits. Countless reports have outlined increased caution on the behalf of investors, with many seeking greater insights, more comprehensive due diligence, and lower valuations for businesses.
For those that look to raise investment, it’s not to say that it’s a bad time, but it is to say that a differing approach is needed. Investors are now seeking sustainable companies, with a particular focus on those with the capacity to weather the financial storm.
Predicting the appetites of investors is an almost impossible task, which is why we’ve rounded up experts from Octopus Ventures, Ada Ventures, and Creative UK, to directly address how to seek investment in 2023.
Contact us now for a free, no-obligation consultation.