Posted At: Mar 02, 2023 - 54 Views
The UK economy is currently facing a recession, and businesses of all sizes are seeing the impacts. The economic downturn is a result of Covid-19, and many other global issues impacting consumers and organisations. In this article, we will look at five ways UK businesses are being impacted by the recession:
Decrease in revenue
Businesses of all sizes are seeing a decrease in revenue due to the economic downturn. This is particularly true for small and medium-sized enterprises (SMEs), which often depend on consumer spending. Many SMEs have been forced to close their doors permanently as they cannot manage the rising costs of energy and skilled labour. This has a number of knock-on effects such as an increase in unemployment which is our next discussion point.
Increase in unemployment
The recession has led to an increase in unemployment as companies make cuts to their budgets and workforce to stay afloat. This negatively impacts consumer spending and further intensifies the recession. The other half of businesses have had to increase their prices to keep up with labour costs, negatively impacting their customers.
Difficulty in obtaining funding
Businesses may find it more difficult to obtain funding during a recession. Banks and other lending institutions may be more cautious about lending money, and businesses may have to pay higher interest rates to obtain funding. This calls for organisations to find capital in other ways, such as making staff redundant.
Supply Chain disruption
Companies may face disruptions in their supply chains as a result of the recession. This can be caused by a decrease in demand for goods and services and by disruptions in global trade. This can cause issues for customers who may have already ordered products/services if the business cannot deliver what it promised. Being as transparent as possible about any delays will help minimise any backlash.
Businesses may face increased competition during a recession. As they struggle to survive, they may lower prices or offer discounts to attract customers. This can make it more difficult for other businesses to compete. As a result, gaining a competitive edge in other areas is vital for businesses looking to survive the economic downturn.
In conclusion, the UK recession is significantly impacting businesses of all sizes. Organisations are facing a decrease in revenue, an increase in unemployment, difficulty in obtaining funding, supply chain disruptions and increased competition. Various government support may help, but it’s not enough. Businesses should be proactive and take necessary steps to maintain their operations and employees during these challenging times.
How Co-employment impacts survival
Any business facing the above issues could lighten the pressure by using co-employment. Using extremely cost-effective labour to get an advantage over their competition, increasing revenue and ultimately improving their financial position. It could also be used as a way to manage any negative customer feedback and enquiries due to supply chain disruption.
How DeskFrnd can help
At DeskFrnd, we save you costs, time and a whole host of headaches with our global co-employment solutions. With numerous superhubs around the world, in the likes of Southeast Asia, South America and Europe, the possibilities are endless. All offices are instilled with UK culture, meaning communication is seamless, and you can operate as if your employees were in-house.
Book a chat to discuss your requirements and to see how we can support your business.