Challenges small businesses will face in 2022

For small businesses, there will be a number of challenges that they will need to be prepared for in 2022. Keep reading to find out what these changes are and how you can adjust to them. The following topics will be covered:

1. Recruiting Talent
2. Tax Increases
3. Location – to hire office space or not?
4. Brexit
5. Business Interruption Insurance

Recruiting talent – employee expectations have changed

As things begin to return to normal, many small businesses are looking to recruit new staff. The issue with this is that the expectations of talent have changed drastically between the periods before and after the pandemic.

For starters, many employees will want the ability to work from home if possible. However, for some jobs this isn’t possible. Retail and food businesses, for example, need staff to be on-site to carry out tasks.

However, if your business operates in an office environment then a hybrid working model will help attact talent. Offering an entirely or partly remote role is very appealing in today’s job market. Should you offer this, you will need to provide the necessary equipment for your new starters to complete their work adequately.

Remote work also reduces commutes to the office. Transport is expensive, and rail prices are set to increase a further 5% this year. Yes, some companies offer travel subsidies for staff, but you can’t pay back time, and improve the discomfort many experience commuting to the office and back.

Another change is attitudes to work-life balance. After plenty of quiet time at home, a lot of people were given the chance to take stock and re-evaluate how they’d been living prior to the lockdown. Employees today expect a better work-life balance and will be attracted to employers who respect this.

If a company does not meet the expectations of the candidate, they will look elsewhere. And expectations are shifting. With social media sites like LinkedIn, it’s possible for potential talent to get in touch with people that have left the company. Culture and moral standing are also important considerations for those seeking work. Office politics, negative attitudes, and questionable actions, play a part in the decision candidates make when choosing a place to work.

Our last tip is to be flexible. Whilst you may believe that you need certain, rigid rules to operate your business, this may make it harder to attract new employees. So, be open to adjusting your current practices if needed – as long you don’t sacrifice the performance of your business.

Tax increases

If you’ve read, heard, or seen anything on the news lately, it’s probably about the rising cost of living in the UK. At the time of writing, inflation rates in the UK are climbing. National insurance contributions and Dividend Tax rates are also set to be increased by 1.25% in April 2022. All of these factors are putting more pressure on the everyday consumer as they try to keep their heads above financial waters.

To combat this, employees will be looking for competitive salaries. This isn’t a money grab, but simply a practical step to help keep themselves and their families afloat.

So, to keep your staff happy and your business running smoothly, look to cut down on unessential spending and focus on injecting cash where it really matters.

Location – to hire office space or not?

This is one of the biggest considerations for small businesses in 2022. After nearly two years of operating entirely or semi remotely, asking whether you need office space is a valid question.

In the pros column, it can make certain projects easier. If your business has collaborative or creative projects, having your team in a single room can make tackling these tasks easier. Coming into an office also has social benefits as it helps your staff to feel more connected to one another. It can also help with motivation and staff morale. If you wish to maintain your office space but you can’t currently use it, make sure you protect it with comprehensive unoccupied property insurance.

In the cons column, the biggest and most obvious item is cost. To have an office or workspace, you’ll need to pay rent, utilities, maintenance, and cleaning. This is on top of managing the space and ensuring that everything is in good working order.

Whatever choice you make moving forward, make sure it’s the correct one for your business and team.

Another alternative is renting co-working space when you need it. Companies like WeWork and Regus offer open spaces, permanent desks and full-floor offices. Facilities include access to meeting rooms and kitchens, with daily to monthly rates available. This is ideal if your team usaully work from home, but need to have face-to-face interaction now and again.

Brexit, import/export trading with the EU

As we move past the pandemic, we are now beginning to encounter the impacts of Brexit. From a small business perspective. And it’s thjose whjo import  those that will be affected are those that import or export to the EU and those with a large number of European staff members.

Under new laws, if you are importing goods or supplies from the EU you may now be charged import duty. The prices of your suppliers may have also increased due to tariffs that have been set.

If you import/export a lot of goods in the EU, you may also need to apply for an Economic Operator Registration and Identification Number.

From an export perspective, you may now need to make customs declarations for each delivery into the EU. You may also be viable for EU VAT as well. Due to these custom checks, transporting and delivering goods will also take more time than it has previously. These delays could change the delivery commitments you are able to make to customers.

Business interruption insurance

One of the major challenges that businesses still face as a result of COVID is interruptions and stoppages. Often, this is the result of your staff testing positive or coming into contact with COVID.

Although the regulations are constantly changing, you and your staff may still be required to isolate if exposed to COVID, which could cause you to close your doors. It’s just the pandemic that can cause this, but other unfortunate events such fire, floods, and security breaches. Doing so will lead to a loss of income which can greatly damage your business – so how can you protect yourself?

By ensuring that you have comprehensive business interruption insurance. These policies are designed to help limit and mitigate the negative impact of needing to halt operations.  Please note that it is not possible to insure against the effects of a pandemic but you can still protect your business from all other types of interruption such as fire or floods, the latter of which are becoming more common in our ever-changing climate.

Dean Laming

Dean is a Chartered Insurance Broker with more than 25 years insurance experience. Through various underwriting, operational and management roles, Dean has built up extensive knowledge of how to run a business and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Dean Laming