As unemployment rates fall, one of the biggest issues that holds back business growth in Cumbria and the North West continues to be the ability to recruit qualified and experienced staff. Whether that’s an electrical engineer, clinical technician, elderly care nurse, catering manager, business development representative or operations manager, the skills shortage is undeniable.

Recruitment is often necessary in growing a business, but there are ways to provide revenue and profit growth without recruiting.

The current employment market
•There are record numbers of people in work in the UK at 32.1 million and unemployment is at a 43 year low of 4.3%
•Nationally, 87% are employed in the service sector (30% in public administration, health and education, 19% in retail hotels and restaurants, 17% in finance and business services, 9% in transport and communication).
•Surprisingly, only 9% of all workers are in manufacturing, 7% in construction and 3% in agriculture.
•The biggest growth areas continue to be public administration, health and education. This highlights why a record number, 15.1 million (47% of all workers,) are female and the main reason why living standards have improved over the last 50 years. As a result, families have more disposable income, driving the growth of the leisure and retail industries, compounding resources in these sectors.
•The number of 50+ aged workers is currently at a record of 31% of all workers. This has been driven by the large number of post-war baby boomers, improved health and living improvements and the recent state pension changes.
•One of the biggest changes over the last few years has been the flexible workers' market. The number of self-employed workers currently stands at 5 million, a huge increase since 2000. There are also 900,000 zero hours contracted workers and 800,000 agency workers providing freelancers, consultants and creating the flexibility organisations requirements in today’s competitive and ever-changing market.
•The average working week is 32 hours.
•The national minimum wage is £7.50 per hour for 25+ year- olds, with average weekly earnings at £480.
All figures from ONS second quarter 2017.

No wonder it's hard to recruit staff. It's even more difficult in Cumbria due to the record low unemployment rate of 3.0% and a record 80.7% of the available and active population in work. (June 2017)

How does my business overcome recruitment difficulties and increase capabilities?
1. Improve the productivity of existing workers

This is a key area where you can save time and create more capability, but also make a huge difference to your bottom line. Most businesses' wages costs are around 50% of the total sales revenue. For a business with a £2 million turnover, a 5% improvement in productivity can put an extra £50,000 per year on the bottom line.

This can often be easily achieved by improving work allocation, planning and utilisation to increase employee productivity. By making small changes in these areas, you’ll find that your business has more capacity to take on more work without recruiting someone else; another opportunity to increase revenue and profit margins.

While the solutions are often quite straightforward, spotting the opportunities for change and implementing them yourself is difficult to tackle alone. You'll probably need the input of an expert from outside your business to cast a fresh pair of eyes over your current situation; someone who has experience of reviewing workflows and helping in growing your business. But you could make a start by measuring key productivity metrics and focus on the effectiveness of supervision of operations managers and their team leaders.
Consider the key priorities to improve these metrics, then ask the team leaders to hold 'toolbox' talks, share employees' challenges and obtain 'off the coal face' ideas. Make sure that the quick win ideas are implemented and follow up with any further improvements. Small incremental changes will all add up over time.

2. Technological innovation

Bring in technology (not just machines); look into software management systems and apps, online account management, customer relationship management (CRM) systems, electronic point of sale (EPOS), design and manufacturing (CAD, CNC) software. Consider resource planning (ERP) software, online customer booking systems and workload planning systems.

Whilst there will always be an initial cost and ongoing fees, you’ll find it cheaper and more reliable in the long run than recruiting a new member of staff and you will find your current employees have more time to do other tasks. Just make sure that you provide the training for your staff to use these systems; a good tip to counter staff resistance to new systems is to simply take away and discard the old books, forms and paper systems! An example is a facilities management company (FMC) I have been supporting who's introducing an App which allows the engineers to close off jobs and invoice on site, rather than complete manual paperwork for someone else to invoice. The current process often causes a delay in invoice and payment, critical information gets missed off and paperwork can even get lost! The App also allows the engineer to price repair jobs on site, get signed off and invoice!

3. Restructure your business

A more radical approach is to rip up the existing organisational chart and start with a blank sheet of paper. Chances are that the industry and your business have evolved and grown arms and legs over the last few years. So, take a step back and think about where your business is going, what the customer demands are now and likely to be in the future.
Then build a company structure that will deliver and be aligned to these. Based on your findings, decide which staff to retain, retrain, reallocate or release and figure out where there are gaps that need to be filled by recruiting or outsourcing.

I’ve supported a number of businesses recently where we've restructured. In all cases, it has been painful for the business owner, but they have all emerged on the other side as a leaner, more agile and

more focused organisation that is more capable of maximising opportunities now and in the future. In most cases, bottom line improvements have been obtained with fewer employees or a more flexible workforce and an improved working environment.
Nervous about taking the plunge?
Think about why you started your business. Did you want to be able to afford or even have the time off for a proper holiday each year? Did you want to build a company that can be managed without you so that you can reap the benefits in retirement?

Did you want to free up a day a week to play golf or to spend with your family? Whatever your reason, just take some time to step back and look at the bigger picture and then ask yourself "can I achieve my personal aspirations if my business continues to run on the same track?". If not, then perhaps it might be worth considering one of the above options.

Want to learn more?
Come and have a chat with me at...

Autumn Budget, Brexit and Business Working Lunch
24 November 2017 from 11.45 to 13.45
Clydesdale Bank, 239 Kingstown Road, Carlisle, Cumbria, CA3 0BQ
Click here to learn more about this event.

If you are looking to grow your business, Business Doctors Cumbria offer a free business health check where we can help you to set a clear vision to understand the key steps you need to take to fulfil your aspirations.

Contact Peter Fleming by phone on 0845 163 1490 or 07966 686112, or by email on , or visit the Business Doctors website .
Click here to book your free Business Health Check .