Increased Costs Are the Biggest Challenge Facing Business in the Next 12 Months According to HR-Decision Makers

Increased costs, including staffing and utility bills, are expected to be the most significant challenge facing businesses over the next 12 months, according to 45% of HR decision makers surveyed by GRiD, the industry body for the group risk sector. The impact is even greater for micro businesses, where 60% report increased costs as their main challenge.

General challenges associated with running a business, such as maintaining profitability and proposition development, is the next biggest concern for HR decision makers at UK businesses, with 37% citing this as a concern. This is followed by keeping up with new technology and skills, cited by 34%.

Katharine Moxham, spokesperson for GRiD, said:

“At the heart of many of the challenges that lie ahead for employers is the responsibility they feel towards their people, from ensuring compliance with employment legislation to managing the increased costs associated with supporting and protecting staff.”

The extent of concern is clear, far ahead of many of the other traditional challenges, such as recruiting and retaining staff, at 31% and 26% respectively.

Katharine Moxham continued:

“Organisations must remain cognisant of the full cost of employment, extending beyond salaries to include the broader investment required to support their workforce. In addition, that cost must deliver value for money, ultimately in profitability for the company via a supported workforce that’s present, engaged and productive.”

With increasing cost pressures in other areas GRiD believes it is vital that businesses derive clear value from their benefits provision, particularly in relation to health and wellbeing, including group risk benefits (employer-sponsored life assurance, income protection and critical illness). This needs to include ensuring that benefits support employees effectively and help prevent illness and injury. It also needs to include a focus on proactive health and wellbeing interventions as well as facilitate successful returns to work, in line with the government agenda.

In addition to offering the right support, it is about ensuring that support is clearly understood and appropriately utilised. With a growing focus on cost control, HR functions will need to demonstrate measurable impact and return on investment. This expectation is not limited to large organisations, as businesses of all sizes will increasingly be required to adopt the same practices.