Emerging economic slowdown heaps fresh pressures on UK industry - business preparation and Government support are critical, says CMIMonday 21 March 2022
- Economic shock from the war in Ukraine will add to the wave of challenges facing UK businesses as they seek to recover from Covid, cost rises and EU departure.
- Chartered Management Institute (CMI) calls on Government for support in 4 key areas including cost of living and rapid energy transition and for businesses to provide strong support for staff and focus on contingency planning.
- Institute highlights need for investment in staff skills and future proofing of organisations in order to weather the looming economic storm.
21st March 2022: A perfect storm of challenges to UK industry need to be mitigated through Government support and sound business practice and planning, the Chartered Management Institute (CMI) has said, highlighting the economic effects of the war in Ukraine adding to enormous headwinds already buffeting the UK economy.
UK businesses are already having to cope with increasing production costs and knock-on effects from the rising cost of living and are also still working out how to realign in order to work in new ways both with Europe and outside of the EU. The recovery from Covid has also only just begun, heaping further pressure. In a new economic briefing ahead of Wednesday’s Spring Statement, CMI has outlined key actions that both industry and Government should take as these pressures are added to by the effect of economic sanctions on Russia rippling through to affect UK business.
CMI is advising businesses and organisations to;
- Provide strong support for staff.
Where possible, support on pay is recommended as staff face rising costs in day to day living. Existing employee benefits may help staff financially (such as season ticket loans etc). Employers should adapt wellbeing support offered during the pandemic for new challenges around finances, as well as financial capacity training alongside.
- Up contingency planning, and be agile, to ensure business resilience.
Managers and leaders need to be ready to plan for these possible disruptions to their businesses into 2023 and beyond. We saw plans developed during the pandemic - managers and leaders in the UK need to respond with similar agility now.
- Invest in upskilling their existing staff to ensure innovation in a time of economic uncertainty
Managers need the right skills to face the coming set of challenges, such as how to support staff and planning for uncertainty. More highly skilled workforces can support productivity, efficiency and innovation. This in turn can ensure cost savings for a business.
- Future proof businesses against ongoing economic shocks
Leaders and managers must find ways to safeguard against significant economic downturn, and build sustainable, resilient businesses that can weather global economic shocks. Supply chain analysis, Net Zero targets and business value should all be reviewed.
Government support is also critical
CMI is also calling on the UK Government to support managers and leaders through 4 key areas:
- Supporting household budgets through measures that directly help UK business, managers and leaders:
The forthcoming Spring Statement offers a key opportunity to support household budgets. For example, providing greater financial support to families to offset energy and food price increases. CMI believes that increases to national insurance for employees and employers should be delayed whilst deep economic uncertainties are at a severe level.
- Shielding investment in skills for resilience and productivity.
Government should support workers of all ages and at all levels through apprenticeships and the apprenticeship levy and business support schemes such as Help2Grow.
- Doubling down rather than slowing down transition to the country’s move to Net Zero
Extra focus should be devoted to accelerating the green transition wherever feasible rather than locking the UK further into the fossil fuel economy with its huge environmental costs and risks for security.
- A new Comprehensive Government Policy for Management and Leadership in England (with similar in Scotland, Wales and Northern Ireland)
CMI is calling for a comprehensive review to support a step change in formally trained, recognised and supported management across the economy, public services and within Government.
Director of Policy, Anthony Painter said:
The actions of Russia in Ukraine are barbaric and an undoubted humanitarian tragedy. The economic sanctions being taken against Russia are absolutely the right thing to do and businesses across the UK need to support them and prepare for their impact.
Even an early conclusion to the conflict would mean managers and leaders in the UK can expect to see growth slow. This all comes as the UK faces existing unequalled challenges from rising cost of living, the adjustment to business post- Brexit and the pandemic.
The upcoming Spring Statement offers the Government an ideal opportunity to really give businesses a leg-up and real support. That includes supporting household budgets and accelerating energy transition. At the same time, managers and leaders can apply the learning from the last couple of years to ensure that their organisations are resilient to weather the storm.
Read the Economic Briefing here: https://www.managers.org.uk/wp-content/uploads/2022/03/Economic-Briefing-Russia-invasion-Ukraine.pdf
Notes to editors
MEDIA CONTACT: Violet Wanda
About the Chartered Management Institute (CMI)
The Chartered Management Institute (CMI) is the Chartered professional body for Management and Leadership, counting over 170,000 managers and leaders in its membership community. There are currently over 12,000 Chartered Managers and growing. Backed by a unique Royal Charter, CMI is the only organisation able to award Chartered Manager status – the ultimate management accolade, which is proven to boost individuals’ career prospects, management capability, and impact in the workplace.