Somerset Business Recovery Survey 2021 - PowerPoint Presentation

1. Somerset Business Recovery Survey 2021Understanding the impacts of COVID-19Data collected from 31st of March to the 21st of May 2021Published 24.06.2021

2. The SurveyThe survey was carried out between 31st of March and 21st of May 2021.The survey covered:FirmographicsChallenges and OpportunitiesOperating capacity (incl. turnover, profitability, workforce)Redundancies and recruitment (incl. skills/occupations)Working from Home (advantages & disadvantages, proportion of workforce WFH)Business premises demandSupply chains and markets (incl. disruptions and opportunities, early impacts of Brexit)Business confidence/sentiments for the future (including future business support)Circa 1,300 responses were received from business across Somerset.

3. How good is the data?Impossible to get a ‘true’ random sample as don’t have contacts for the 20,000+ businesses in Somerset from which to sample from. Would also have inevitably had some non-response bias. However, the survey was sent to over 8,000 businesses and received more than 1,300 responses, providing good (in principle) statistical significance (margin of error of +/-3% at 95% confidence level).Moreover, though post-stratification* of the responses and the application of 'weights' to account for divergences between sample and population, it was possible to further shore-up the representativeness of the results and correct for response bias. This was done for industry type only, because 1) industry type accounted for the largest divergences (see next slide) and 2) evidence has shown that industry type is a key ‘determinant’ of economic impact of COVID-19.

4. To which of the following industries does your business belong? The survey sample comprised businesses across all industry types. Accommodation & Food, Wholesale & Retail, Arts, Entertainment & Recreation and Other Service activities were ‘over-represented’ vis-à-vis the known business population. The converse was true of Construction, Agriculture, and Professional, Scientific and Technical activities.To compensate for these divergence, where necessary, industry ‘weights’ have been applied to the data. 1284 Responses

5. In which of Somerset’s district council areas is your business based?1283 Responses

6. How many employees does your business have?The survey sample comprised business across all employment size bands, and was composed of similar proportions of each size as is the case within the known, wider business population, albeit with micro businesses slightly underrepresented, and small and medium sized businesses slightly over-represented. 1283 Responses

7. What was your business average annual turnover pre-COVID-19?1282 ResponsesThe survey sample comprised business across all turnover bands. The survey sample was over-represented by businesses in the £0-49,999 turnover band and under-represented by those in £100,000-199,999 band. It is not known why this might have been.

8. How long has your business been trading?1284 Responses

9. To what extent do you agree with each of the following statements?609 strongly agree/agree (49.51%) - 1230 responses972 agree/strongly agree (78.58%) – 1232 responses399 agree/strongly agree (32.66%) – 1222 responses314 strongly agree/agree (25.7%) – 1221 responses

10. To what extent do you agree with each of the following statements?agree/strongly agree 1070 (87.1%) – 1228 responsesAgree/strongly agree 457 (37.3%) – 1225 responses

11. Please describe any new opportunities that C-19 has presented for your business?A significant number of respondents had diversified into new products and services, mainly through the creation or strengthening of an online presence.Many respondents indicated they had seen an increased demand, as well as many businesses stating they had streamlined existing operations. In addition, a significant proportion of businesses had either introduced takeaway/delivery services, in addition to click and collect services.860 responses

12. In the last 12 months, roughly what percentage of your normal turnover has your business been able to achieve?1208 Responses5% of businesses reported having made 0% of their normal turnover, whilst 47% of reported achieving 50% of normal turnover or less.These results have been ‘industry weighted’ – see slide 3.

13. In the last 12 months, roughly what percentage of your normal profitability has your business been able to achieve?1187 Responses16% of businesses reported have made 0% of their normal profits, whilst 53% reported achieving 50% of normal profits or less.These results have been ‘industry weighted’ – see slide 3.

14. How confident are you that your business turnover will return to pre-COVID levels in the following years?1134 ResponsesConfidence is mixed that turnover will return to ‘normal levels’ in the short term, with 45% very or fairly unconfident turnover will return to normal levels in 2021.By 2023+, businesses are generally more optimistic of business recovery, with 73% of businesses either ‘fairly confident’ or ‘very confident’ of normal turnover levels returning.

15. How confident are you that your business profitability will return to pre-COVID levels in the following years?1132 ResponsesAs might be expected a significant percentage of businesses are either very or fairly unconfident (46%) of business profitability returning to normal levels in 2021.By 2023+ by contrast, 67% of businesses are either fairly or very confident that business turnover will have recovered to pre-COVID levels.

16. Has your business made use of the CJRS in the last 12 months?1192 ResponsesBusinesses were evenly split between those who have and those who have not made use of the CJRS (furlough) scheme in the previous 12 months.

17. Roughly what proportion of your workforce, on average, has been on furlough in the last 12 months?582 ResponsesOf those who has used the furlough scheme in the last 12 months, 36% of businesses stated that 100% of their workforce had been on furlough over the past 12 months, whilst 79% of respondents had 50% or more of their workforce on furlough leave over the past 12 months.For HMRC stats pertaining to CJRS/SEISS figures in Somerset, including industry usage, please see our COVID-19 economic impact summary.

18. Has the furlough scheme allowed your business to retain employees that otherwise would have been made redundant?584 ResponsesCrucially, of those who had used the furlough scheme in the last 12 months, 85% said it had allowed their business to retain employees that otherwise would have been made redundant.

19. In the last 12 months, has your business made any redundancies and/or does it plan to make any in the next 12 months?1205 Responses10% of Somerset businesses said they had made redundancies in the previous 12 months, whilst 73% had not. Only 4% of businesses anticipated making redundancies in the next 12 months.These results have been ‘industry weighted’ – see slide 3.

20. Where you have made and/or plan to make redundancies, approximately how many full-time positions do these represent? 1205 ResponsesBusinesses within the survey sample reported 359 full-time equivalent redundancies within the previous 12 months, and a further 49 to be made in the next 12 months.We can assume that once extrapolated from the sample to the wider business population, these figures would be far higher.

21. Where you have stated either that you have made redundancies or plan to make redundancies, can you please describe the main roles and/or skillsets of those being made redundant? 142 ResponsesResponses to this question were coded/grouped by Standard Occupation Classification (SOC).Elementary occupations accounted for the most commonly cited occupation type made redundant. This largely consisted of waiting and front of house staff, reflecting the high proportion of accommodation & food businesses in the survey sample.Whilst administration roles were also commonly cited, little further explanation was provided. Please see Somerset Trends for a breakdown of SOCs within the Somerset economy.

22. Has your business attempted to recruit anyone new in the last 12 months?59% of businesses had not attempted to recruit anyone new in the last 12 months. 28% of businesses had attempted to recruit, although not all were successful.These results have been ‘industry weighted’ – see slide 3.1189 Responses

23. Where you have made and/or plan to make recruitments, approximately how many full-time positions do these represent? 206 ResponsesRespondents reported 1088 recruitments made in the last 12 months, with a further 1032 recruitments planned in the next 12 months.Once extrapolated to the wider business population, we can assume the number of recruitments made and/or planned to be far higher.

24. Please can you describe the job role/s (or skillsets) you successfully recruited?213 ResponsesResponses to this question were coded/grouped by Standard Occupation Classification (SOC).The strong representation of elementary occupations was largely constituted by recruitments within the accommodation & food industry (waiters, bar staff), in addition to cleaners and warehouse workers.Skilled trade occupations were largely dominated by chefs and groundspeople, in addition to some mechanics and electricians. Sales & customer service occupations were mostly comprised of retail shop assistants. Managers were also successfully recruited across a variety of industry types, in addition to secretarial and administrative work also being well represented.

25. Please can you describe the job role/s (or skillsets) you were unsuccessful in recruiting?135 ResponsesResponses to this question were coded/grouped by Standard Occupation Classification (SOC).Skilled Trades Occupations were largely represented due to the high proportion of businesses failing to recruit chefs. This is an issue that predates both COVID-19 and the initial impacts of Brexit.Elementary occupation failures to recruit were comprised primarily of bar staff and cleaners.Caring, leisure and other service occupations were more mixed, with businesses failing to recruit hairdressers, dental nurses and care staff, amongst others.Process plant & machine operative occupations were largely constituted by failures to recruit delivery drivers.

26. Where you were unsuccessful in recruiting, why do you think that was?246 Responses22% of businesses cited the temporary or uncertain nature of their vacancy as the primary reason for failed recruitment.15% cited a lack of skills amongst applicants (see next slide). Additional reasons cited included lack of required attitude/approach, lack of experience, unattractive salary, unsociable hours, and lack of formal qualifications.‘Other’ responses included businesses’ views that applicants were unwilling to seek a job whilst on furlough, and long-standing recruitment challenges including shortages of chefs and bar staff.

27. Which skills were lacking amongst applicants? 43 ResponsesAmong those who cited lack of skills as the reason for recruitment difficulties (see previous slide), the most commonly cited skills deemed to be lacking were technical skills specific to the role (39%).The second most common response was general employability and work readiness (24%). 18% of businesses cited interpersonal and communication skills as lacking amongst applicants.Please note there was a small number of responses to this specific question.

28. Please can you describe the job role/s (or skillsets) you hope to recruit?313 ResponsesSimilarly to previous questions pertaining to recruitment (see slides 24 and 25), a sizeable number of elementary roles reported here were represented by bar & kitchen staff, as well as cleaning staff. Skilled trades were largely constituted by businesses seeking trained chefs, in addition to grounds maintenance professionals and gardeners. Please see Somerset Trends for a breakdown of SOCs within the Somerset economy.

29. Do you foresee any challenges or barriers with your planned recruitment, and if so, what might they be? 1018 ResponsesSimilar to responses regarding unsuccessful recruitment (see slide 26), respondents reported the temporary or uncertain nature of employment as the primary barrier for planned recruitment (18%).In addition, 15% of businesses reported salaries to be uncompetitive, especially when compared to applicant expectations. Among ‘Other’ responses, many respondents stressed that the economic impacts of the last 12 months on revenue had limited their capacity, resources and/or inclinations to recruit.

30. Are the skills demands of your business likely to change over the next 5-10 years?1160 Responses24% of respondents said their skills demands were likely to change over the next 5-10 years, whilst 17% didn’t know.59% didn’t think their skills demands would change in the next 5-10 years.

31. Please describe how your skills demands are likely to change in the next 5-10 years?251 ResponsesOf those who said their skills demands are likely to change (see previous slide), many cited digital skills needs, including 29% citing general digital literacy, 16% citing digital marketing, 9% citing digital content/production and 8% citing digital management skills.‘Industry specific qualifications’ were fairly diverse, although qualifications connected to construction were the most commonly cited.‘Higher qualified staff’ responses referred to a range of skill attainment levels, not just high-level skills.

32. With the right support and advice, would your business consider recruiting to an apprenticeship or traineeship role?1163 Responses35% of businesses said they would consider recruiting to an apprenticeship or traineeship role. 29% said ‘Don’t know’, which might suggest scope to provide more information to businesses on the benefits of such roles.36% of businesses said they would not recruit to an apprenticeship or traineeship role. For those who provided additional comments, this was due to a variety of reasons, including: the business already supporting an apprentice, businesses supporting apprenticeships in the past, and/or business not having the capacity to support an apprenticeship.

33. Does your business have plans to implement training programmes/upskilling for its employees in the next 12 months?1158 ResponsesMany businesses who responded ‘yes’ to this question referred to developmental/ongoing training courses within their business, including IT skills and training specific to the industry in question.Those businesses who said ‘don’t know’ or ‘no’ provided little further explanation as to why training programmes would not be implemented.

34. Would your business be interested in engaging with education providers to offer careers insights to young people?1150 Responses18% of businesses said they would be interested in engaging with education providers. These businesses will have been signposted to the Somerset Education Business Partnership (EBP).

35. 12 months from now do you think your workforce will have…1157 ResponsesMore than half of businesses (51%) anticipate that their workforce will remain unchanged in 12 months. Encouragingly, a substantial 26% of businesses anticipate their business workforce will grow, whilst only 4% of businesses think it will shrink.These results have been ‘industry weighted’ – see slide 3.

36. Prior to the COVID-19 pandemic what proportion of your workforce regularly worked from home & During the last 12 months what proportion of your workforce has regularly worked from home?1128 & 1122 ResponsesAs might be expected, the proportion of the workforce regularly working from home has been higher in the last 12 months than prior to the pandemic. 23% of businesses stated 100% of the workforce had been regularly working from home in the last twelve months compared to 14% prior to the pandemic. Prior to the pandemic, 68% of businesses did no regular home-working, compared to 40% during the last 12 months.Please note that these figures will include businesses for whom home-working is not an option.These figures have been ‘industry weighted’ – see slide 3.

37. Assuming all public health restrictions are fully lifted, roughly what proportion of your workforce will regularly work from home?1123 ResponsesWhen compared with pre-pandemic home working (see previous slide) the figures here suggest an increase in home working moving forward, though a reduction compared to that seen in the last 12 months. 27% of businesses said that 50% of more of their workforce will work from home in the future.55% of businesses stated that 0% of their workforce would regularly work from home in the future. Please note that these figures will include businesses for whom home-working is not an option.These figures have been ‘industry weighted’ – see slide 3.

38. On average among those you anticipate working from home regularly in the future, roughly what proportion of their hours do you think will be done from home? 332 Responses74% of businesses anticipate that workers regularly working from home will spend 50% or more of their working hours doing so. 33% anticipate working entirely from home.

39. To what extent do you agree with each of the following statements regarding working from home?336 strongly agree/agree (33%) - 1031 responses485 agree/strongly agree (47%) – 1035 responses369 agree/strongly agree (35%) – 1034 responses518 strongly agree/agree (48%) – 1027 responses

40. To what extent do you agree with each of the following statements?agree/strongly agree 482 (47%) – 1031 responsesAgree/strongly agree 152 (15%) – 1023 responses

41. As a result of home working within your business, are you likely to need more or less space within commercial business premises (either rented or owned) in the future?351 Responses50% of businesses stated that they would require the same amount of space within commercial business premises, whilst only 7% suggested they would require more space.15% of businesses stated they would require less spaceMost ‘Don’t know/Not Applicable’ responses were due to the business not renting or owning commercial premises. Please note that this question was only asked of businesses who plan to work from home in the future – see slide 37.

42. In the last 12 months, has your business had to change where it sources materials and/or services from? Please select one of the following. 1124 Responses45% of businesses have had to find new suppliers in the last 12 months, 21% of whom still did not manage to get everything they needed.45% of businesses did not need to change suppliers of goods and/or services.These figures have been ‘industry weighted’ – see slide 3.

43. Were your difficulties with sourcing materials and/or services the result of any of the following... 587 Responses104 Responses60% of businesses cited COVID-19 related impacts as the key reason for difficulties sourcing materials & services, whilst 33% cited Britain’s exit from the European Union.For the 7% of other responses documented in the graph on the right, shortage of available materials and delays in supply chains were identified as the most common issues. Please note that these results reflect respondents’ views/perceptions on impact determinants, rather than necessarily the actual causes.

44. Are you aware of any impacts on your business as a result of Britain's exit from the European Union?1129 Responses354 Responses40% of businesses said they had been impacted by Britain’s exit from the European Union.Of those impacted, numerous factors were reported, including increased costs (37%), import delays (18%) and supply shortages (16%), reduced exports (6%) and reduction in EU staff (3%).

45. How would you describe the current outlook for your business?1224 Responses60% of businesses were ‘very positive’ or ‘fairly positive’ about the current outlook for their business, whilst 13% said their outlook was either ‘fairly negative’ or ‘very negative’.

46. Please tick any forms of non-financial support you feel would be beneficial to your business.1056 ResponsesThe most commonly cited form of non-financial support requested by businesses was marketing support (29%), followed by networking (14%) and training support (12%). ‘Other’ responses largely comprised needs relating to financial rather than non-financial support.