Market update – Aug 22

Simon RoderickMarket updates

Notes from the park - monthly updates
Notes from the park - monthly updates

Market update – Aug 22

In tricky waters, captains change tack more often – on the value of flexibility, horizon scanning and good communication.
September 5, 2022
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In tricky waters, captains change tack more often.

The original premise of lockdown in the UK was that it was for three weeks to save the NHS. The initial furlough was relatively short to cover this period + a bit more. It was clear that lockdowns would then go on for much longer, and Labour called for the UK to follow some European countries to provide furlough for up to two years. However, the UK scheme was extended for a bit longer, as we were eyeing “victory” over the summer, then by Christmas, and the rest is history.

In May of this year, Rishi Sunak felt a £400 discount would get poorer households through the energy crisis. It was evident soon after that this wasn’t enough (even before Putin did the inevitable and stopped gas via Nord Stream 1) and now we are looking at potentially capping energy costs for two years. During this time, many businesses have seen their energy costs explode. Lockdown winners, are now looking like recovery losers, as spending patterns have shifted.

Taking another sailing analogy, it’s going to take years for this ship to be righted. We have inflation, labour shortages, NHS backlogs, a war in our continent, strikes, and lockdowns are still happening in China hampering supply – and a whole of host of other unknowns will reveal themselves to.

Apologies for the brief overview of recent history, but the point I’m trying to make is that there’s a lot for management teams to think about at the moment. In the industry we support, most firms are doing well and the employment outlook is positive. However, to navigate the challenges of the last few years across all industries, one of the key skills successful management teams have needed, is the ability to horizon scan.

The firms who have looked over the horizon, have continued to thrive. They’ve also been humble enough to change and rip up their old ways of thinking. However, this can present challenges for teams, who often like certainty. What often doesn’t change at good firms is the destination, even if the route to get there does. To avoid storms, to chase the better weather, management teams are working hard changing tack. However, this can throw up a disconnect between management, who have privileged access to information on strategy, and those who rely on managers for the trickle down of information. Therefore, we’re seeing more than ever a need for HR teams to act as a conduit between management and teams.

Explaining why actions are changing to colleagues more essential than ever, and improved frequency of communication often means that those in the business, working daily with customers, can also provide valuable input on how to chart the best cause forward.

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The next couple of years will sadly be slightly tortuous for those who like certainty. Hirers would be well advised to focus on identifying those who cope with change well, and who are flexible, and businesses equally need to step up the quality of their communication to support valuable colleagues who may find this time difficult.
Want an informal chat? Contact us on 01525 864 372 / [email protected].

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