The start of a new year, is an opportunity to take stock, acknowledge your current position and embrace the plans for the year to come.
Understandably, taking a moment to reflect and reassess is easier said than done for many businesses, especially those that are still finding their feet after the turbulence of the last 12-24 months.
That’s why at the beginning of 2023, we wrote to our clients announcing the launch of our inflation campaign – an initiative that seeks to support businesses as they navigate these uncertain times. Working in partnership with our clients to provide the level of advice that will help to build resilience into the foundations of your organisation as it grows.
Putting this into practice, what does this mean for the new financial year?
Addressing the NOW…
At the start of the new financial year, whilst it is important to plan ahead it is of the utmost importance, not to forget to address the current challenges we are collectively facing.
Acknowledging the current climate and the challenges it brings.
Whilst there are numerous difficulties facing business today, there are three key challenges that through conversations with clients appear unanimous across sectors.
- Rising costs
78% of senior decision-makers in large businesses identified rising costs as the biggest risk to their business in 2023. The cost of living crisis has resulted in unprecedented financial pressure throughout the UK with energy prices being a particularly sore spot. Some small businesses seeing annual increases in the region of 250%. Whilst households received a cap on domestic energy prices, businesses have faced escalating energy costs. As we enter the new financial year businesses have been hit yet again by another surge in energy prices compounded with the increase in the National Minimum Wage. - Candidate shortages
Figures from ONS (Office for National Statistics) suggest UK unemployment is at lowest rate since 1974 yet the estimated number of vacancies remains around 1.1 million. The shortage available candidate is further impacting the workload of existing employees and in turn the quality of service. With so few candidates available hard-pressed employers are being forced to grant significant pay rises to retain their existing employees and pay even more to attract what new talent that is available for hire in such unsettling economic times. - Employee wellbeing
Employee wellbeing remains a top concern organisations and the people risk exposures associated.
There are two key areas hitting the headlines:
- The NHS crisis and the impact this is having on the quality of life of employees seeking medical attention. Since the pandemic over 50% of patients have struggled to get a GP appointment and over 200,000+ people in the UK waiting over a year for routine operations with the NHS. Source – https://www.partnersand.com/businesses/wellbeing-health-and-protection/health/
- Financial wellbeing. Against the backdrop of the cost-of-living crisis, financial education has never been so important. Poor financial wellbeing effects employee health and has a direct impact on employee performance and productivity with employees with financial problems 6x more likely to produce poor quality work. Not to mention 69% believe that their employers have a responsibility to support their financial wellbeing.
So, what can be done now?
Despite the apparent conflict between employee attraction and rentention and inflationary costs employers shouldn’t be disheartened – there remains cost-effective and in some case cost- neutral methods of managing these challenges with the right employee proposition programmes in place.
We recommend exploring your options with your adviser today.
Protecting tomorrow
Having taken stock of ‘the now’ it is time to look ahead, assessing and implementing the strategies and tactics needed to reach this year’s goals whilst protecting future growth.
Starting with arguably the most important aspect of your FY23 plan – your protection.
Above anything else, at the start of a new financial year it is important to acknowledge your business isn’t the same as it was 12 months ago, nor will it be in another 12 months.
Often, this seemingly obvious statement is overlooked, either accidentally in the excitement of the year ahead or somewhat intentionally, burying one’s head in the sand to avoid the realities of an increasing premium.
50% of businesses are underinsured – source Aviva.
The problem with both above cases is that failing to acknowledge changes within your organisation can leave your insurance programme outdated, and more importantly, leave you underinsured. According to Aviva, 50% of businesses are underinsured, with RebuildCostASSESSMENT.com estimating 85% of buildings are underinsured.
If you are unsure whether you have kept your adviser up-to-date with all the ongoing developments in your business, now is the perfect opportunity to bring them up to speed.
“Our world is changing – it’s no longer good enough, or safe enough, to think of the traditional risks that used to face a business. At Partners&, we focus on looking at both your current and future risks, rather than simply your past risks.”
Protecting yourself – in today’s litigious world, why protect your business but leave yourself exposed?
Did you know as a director and officer you could be held personally liable for claims made against you in respect of the decisions or actions you take on behalf of your company?
Unfortunately, more often than not we find that management teams have successfully protected their business but failed to protect themselves.
The increasing importance of Management Liability
Insurers are reporting that since 2020 there has been an increase in regulatory investigations, contract disputes, fraud issues and serious accidents resulting in increasing claims against senior leadership. According to Allianz Insurance plc, reports are suggesting that nearly 50% of businesses have experienced a claim or investigation in the last 12 months, with a 30% increase in claims against directors and officers in the last decade.
Management Liability insurance in its simplest is there to safeguard your organisation’s management team. In place to protect against personal or company loss should a claim be bought against an individual for the decisions or actions they make of behalf of the company.
You can find out more about the evolving threats facing business leaders, here
Planning for your future
Finally, looking to the future. In order to deliver effective growth organisations need to do more than be reactive to their environment. They need to be proactive. Anticipating and foreshadowing clients’ needs in order to stay ahead. Whilst in conversation our ecosystem partners, Guy Harris and Adrian Gill of Mazars, they shared with us the secrets of a great business planning including the two key elements high performing business have absolute clarity on. You can find out more about their guidance for business planning, here.
Your perfect exit
Whilst for some an exit from your business might be imminent and for others it may feel a million miles away. It is always worth exploring your future plans with your risk adviser. Doing so can provide you with the support you might need in navigating these decisions. Whether that be connecting you with the right individuals to advise you on anything from successful merger or acquisition or an adviser who can help you plan for your financial future. To us it is always about providing clients with advice that makes a difference.
To understand more about the issues raised above, connect with one of our advisers today by phone 03300 940177, or by email contact@partnersand.com.
If you already have a dedicated Partners& adviser, feel free to reach out directly and they will be more than happy to support you with any questions you might have.