Attracting new staff is a priority, but many businesses will also need access to a new range of financing options to be able to get back up and running
With restrictions finally easing and operations ramping up again, business owners are finding there is one overriding issued on their minds as they plan their roadmap to recovery and that is recruitment. Those trying to secure staff have two crucial aspects to consider - competition and capital.
Competition for employees is currently at an all-time high. With tens of thousands of businesses potentially opening their doors at the same time, the jobs market has picked-up very quickly and competing to find and attract the right talent is taking longer than expected. The retail and hospitality industries in particular are experiencing significant difficulties in recruiting staff at a time of the year that is traditionally ripe for securing employees in these sectors.
In early May, when non-essential retail reopened, the country's largest shopping centre in Dundrum, Dublin had between 500 and 1,000 vacancies, with some stores unable to stay open until their usual 9pm closing time due to staff shortages.
Why is there such a scarcity of staff in retail and hospitality? Employers are reporting that many have now left the sector in a bid to find roles in more secure industries. If you are a business owner and you have not begun recruiting, you need to take urgent steps now as it is going to take time to fill the jobs required to fulfil your re-opening ambitions.
The retail and hospitality industries in particular are experiencing significant difficulties in recruiting staff at a time of the year that is traditionally ripe for securing employees in these sectors.
Differentiating yourself from other employers will help, so consider offering better incentives to potential employees such as training and development opportunities, increased flexibility to help them strike a better work / life balance, a variety of health and well-being initiatives, an internal reward scheme or occasional lunch vouchers.
The recruitment process also requires adequate working capital. If you hire staff, but the doors of your business won’t open for another few weeks, you will find yourself with a large payroll bill with no income to match. But employers cannot leave recruitment until the government restrictions are fully lifted because they will need to have logistics in place to be ready to reopen. Business owners will also need to ensure they have adequate capital to pay suppliers and other associated business costs.
Government measures introduced at the start of the pandemic were absolutely necessary to support the economy and no doubt saved thousands of businesses, but they were only ever intended as short-term measures. The focus now needs to switch to more sustainable forms of working capital funding that allow SMEs to take control of their future, plan for the long-term and focus on growth.
It is here that the private sector can and should be playing a greater role with cashflow. Alternative finance options, such as invoice finance, will be a vital part of a more sustainable recovery. This facility essentially offers businesses access to money outstanding from their unpaid invoices, helping them to access income they have already earned but not yet received.
This offers businesses the option of using their own funds to improve day to day or seasonal cashflow fluctuations or finance bigger growth plans without having to borrow any money. Unlike a loan or overdraft, Invoice Finance does not involve ongoing monthly repayments. This revolving credit option means that once your invoices are paid, you can just continue the cycle – upload your invoices, draw down, use the funds and simply repeat.
In addition to assisting with cashflow, it’s worth noting that Invoice Finance can also be utilised to fund a range of other growth scenarios such as investing in infrastructure or equipment, funding an expansion or mergers and acquisition activity, or simply stabilising a business during turnaround.
Yes, significant obstacles remain, and uncertainty lingers, but thousands of SMEs across Ireland have shown incredible ability to adapt to change. Research we conducted in Britain recently shows that three quarters of business owners there are very confident about opportunities in 2021, with 74 per cent believing demand will be back to pre-pandemic levels by Christmas. If these sentiments are mirrored here, it’s very good news for Ireland Inc.
By planning ahead now, and finding the right capital partners, you can avoid recruitment pressure, capacity challenges and cashflow limitations, allowing you to rebuild your business and thrive in a transformed economic landscape.
Mark O’Rourke is the managing director of Bibby Financial Services Ireland, a provider of financial support and funding solutions for Irish SMEs. Mark is also the vice chairman of the Irish Asset and Invoice Finance Association, the representative body for the invoice finance and asset-based lending industry in Ireland.
Article published by the Business Post June 6, 2021