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Our latest research reveals the majority UK business leaders are bracing themselves for economic crisis.

Affirming the typical British stereotype of having a ‘stiff upper lip’, UK business leaders are keeping their heads down and cracking on with creating their master plan, bracing themselves for as and when the economic crisis strikes.

Businesses have become well accustomed to pivoting, planning for the worse and proactively adapting in recent years. The next tidal wave of doom is no different, but UK businesses refuse to be caught out.

We researched this very issue in our latest report, investigating business leaders' views on the potential of the UK entering a recession, and how they plan to respond. 

 

Using independent research panels, the results showed an overwhelming majority of UK businesses (96%) are actively making plans to mitigate the impact of a recession.  

Almost two thirds (64%) said looking for new markets would be a priority, while 61% are planning to diversify products and services and over half (54%) are preparing to acquire other businesses.

These aggressive market growth strategies significantly outweigh the more negative approach of cutting Opex (51%) and Capex (50%) budgets. The fact that businesses are not seeing this as a time to retrench and step back underlines the vastly different financial and socioeconomic factors that have led up to the current downturn compared to previous recessions. 

Demand is still strong in many markets as companies look to build back up after the pandemic. Plus, of course, staff and skills are still in huge demand – with the UK currently experiencing the lowest level of unemployment in 50 years. 

Firms not only recognise the importance of attaining and retaining talent to meet new business objectives, but also know there is minimal flexibility around staff reduction or pay cuts to alleviate rising costs. Indeed, staff costs remain one of the key challenges – with 31% planning to increase salaries to tackle the rising cost of living to help improve how employees work in the future. Almost half (49%) plan to offset that cost by subletting unused office space as a result of staff working remotely. 

Big technology companies are taking strides to pave the way. Microsoft is now signing larger deals for its Azure cloud-computing software, moving clients to pricier versions of Office cloud programmes and has switched to a subscription-based model for its software products and services versus its previous one-time buy offering.

Not all businesses suffer in a recession – and the aggressive approach planned by UK companies to the economic challenges ahead suggests business leaders are wholeheartedly embracing that thinking. 

Companies need to be creative and scope out other ways to diversify during difficult times. Those that are more resilient, anticipate, cope with and then adapt to new circumstances will be the one that can come out stronger than before.

 

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