With so much going on in the world today, it’s not surprising that the challenges facing you and your business are becoming increasingly complicated.
One day it could be supply chain issues, the next worrying about how to keep your staff motivated when they’re struggling with the cost of living impact on their private lives.
Being able to build resilience to these challenges and emerging risks has never been more important to your success. Understanding them is the first step – and realising you’re not alone can help.
Aviva has published findings from interviews with over 1,200 UK business leaders1 in its 2023 Risks Insights Report. Businesses of all sizes, from sole traders to larger corporates across all sectors fed into the research.
The ongoing cost-of-living crisis is weighing on businesses’ confidence. Two-thirds (63%) of business leaders said they are ‘worried’ about the impact of the cost of living on their business, while 29% said the crisis will have a ‘serious’ impact on their business.
Let’s take a closer look at some of the biggest challenges businesses are facing.
Supply chain pain
Supply chain disruption is having one of the biggest impacts on businesses, with vulnerabilities in global networks exposed during the pandemic are now exacerbated by the war in Ukraine.
- 45% of companies report an impact on their business due to supply chain disruption.
- 38% are experiencing significantly higher supply costs due to inflation pressures.
- 21% have suffered operational disruption due to supplier interruptions.
- 16% of companies have suffered a total supplier failure over the last 12 months.
The increasing risk of underinsurance
The report has shown that a fifth (21%) of UK businesses have reduced, or are or considered reducing, their insurance cover over the last year.
The findings go further and indicate that many businesses simply don’t know if they have the right sums insured.
While two-thirds of businesses are confident that they have the right level of coverage in place (with 13% not confident and 21% unsure), Aviva estimates 50% of UK businesses to be underinsured.
Some 40% of policies with buildings have at least one premises suspected to be underinsured by 20%. Similarly, 40% of properties haven’t updated the amount it’s insured for within the last three years.
Skills shortage and the competition for talent
Staffing and turnover pressures can often leave companies unable to perform key duties and meet customer demand. In the last year, businesses have faced difficulties both in hiring new talent and retaining existing staff:
- 63% of companies have struggled to attract new employees.
- 64% have struggled with staff retention.
A third of companies are increasing pay to attract or retain staff (31% to attract and 25% to retain), further impacting an already-squeezed bottom line.
Your people and the cost of living
Difficult economic times don’t just impact business – they affect the people who work for you too.
Right across the country, we have all been through very difficult times; from the worry and isolation of Covid-19 to an often-bumpy return to ‘normal’ office life and then right into a cost of living crisis, economic uncertainty and soaring inflation.
This journey has taken its toll on everybody. 30% of businesses believe the mental health and wellbeing of their staff has deteriorated over the last 12 months – from what may have been a low post-pandemic starting point.
Beyond the impact on individual and collective wellbeing, tired and stressed employees are more likely to make mistakes and have accidents or near-misses.
Helping you to tackle the challenges your business is facing
We hope this information has helped you understand and consider some of the risks to your business. 2023 promises to be a challenging year for businesses of all sizes and sectors.
At a time when you’re grappling with how to tackle market uncertainty, we’ll help you to navigate the risks and challenges facing your business and enable you to build resilience in an uncertain world…it’s what we call the Partners& Difference.
The research was carried out by YouGov on behalf of Aviva. YouGov surveyed more than 1,200 UK senior business leaders from small, mid-market and corporate businesses (as defined by their annual revenue), from nine industries: Professional & business services; manufacturing & industry; construction & real estate; arts, entertainment & leisure; technology & electronic; retail & wholesale; motor trade; charities; and the public sector. Fieldwork was conducted between 31st August – 5th October 2022