In the UK, businesses are having to change and adapt at a rapid pace. The impact of Brexit and the Ukrainian war on the UK economy, coupled with the rapid rise of automation and digital transformation, has made it more critical than ever for companies to stay ahead of the curve.
In 2023, businesses will face fresh challenges as they try to keep up with this new speed of change. This article will give you a glimpse into these challenges, so you can be prepared for what lies ahead.
1. Supply Chains
Supply chains are likely to be disrupted by rising costs, which will make it more difficult for businesses to get fast and affordable delivery of materials and goods. Labour shortages could also continue to be a problem as people leave their current roles to seek better opportunities.
International trade disruptions could also severely impact some businesses’ ability to operate at full capacity. Many countries are also experiencing soaring storage fees along with shortages of key raw materials, which all affect UK supply chains.
You can learn more about these challenges is our article Supply Chain Challenges and Tips For 2023.
2. Energy Prices
One of the biggest challenges facing businesses in 2023 is the rise in energy prices. Energy costs have risen sharply over the past year and it’s expected that they’ll continue to increase over the course of 2023. Employers have no choice but to keep their offices heated in winter and air conditioned in summer, so looking at renewable energy sources could be advantageous.
3. Cost of Living Crisis
In the UK, all employees are struggling to keep up with the rising costs of living. The prices of essentials like food have risen at their fastest rate in 45 years. This has caused many people to struggle to make ends meat while facing increased pressure on their budgets and spending habits. However, companies are feeling the increased costs of these supplies as well, forcing them to raise their prices for customers, impacting profits as well as sales revenue.
Inflation is a big challenge for businesses in the UK right now. Many banks are saying that inflation rates will slow down in 2023, but this speculation is still making businesses cautious due to the uncertainty surrounding our current economic climate. World economies are slowly adapting to economic changes to reduce inflation, but businesses are still worried that it might not be enough.
Businesses are battling to recruit small pools of talent and there are skills shortages in almost every sector. As a result, businesses have to attract new employees by increasing salaries and improving employee incentives. But this could be unsustainable for businesses in the long run and could lead to higher prices for consumers.
The pressure on businesses will increase as a result of this and there are concerns that many companies will struggle to recruit the workers they need to meet demand in an already tight labour market.
6. Digital Transformation
In recent years, the UK has seen a rise in the number of businesses trying to adapt to our new digital landscape. At the same time, we’ve seen a dramatic increase in automation in the workplace. This means that businesses are relying more on digital workflows to get things done, and that can have some serious challenges for managers and employees alike.
The result is that now, more than ever, businesses need to invest in technology that will help them to keep up with the changing demands of their customers. You can read more about this topic in our article 6 Ways Digital Transformation Can Boost Your Business.
7. Remote Working
Remote working has become increasingly popular since the pandemic, and many companies are finding it necessary to accommodate more and more remote workers. While this is great for employee satisfaction, it presents a unique set of challenges for businesses looking to save money.
Employees who work remotely often prefer hybrid working, meaning they still want to come into the office a few days a week. This means that businesses must keep office spaces to accommodate their staff, which can be expensive to run. One solution to this is moving offices into more regional areas, giving staff what they want while also taking advantage of cheaper rental costs.
Sustainability has become a top priority for many businesses. The challenges facing businesses in 2023 will be how best to address sustainability as a whole, and how to incorporate it into their day-to-day operations. In the UK specifically, companies are already feeling the effects of shifts in consumer spending habits towards more sustainable products.
9. Customer Expectations
Customer expectations are higher than ever. They want great service and products, but they also expect quick delivery and low prices. This is a challenge for businesses in 2023 because the economy is still struggling. To keep up with customer expectations, businesses will have to make sacrifices in other areas of their business or find ways to cut costs while maintaining high-quality products and services.
10. Political Events
Political events are having a massive impact on our economic climate, and this uncertainty is having a huge impact on businesses. Brexit struggles along with pressure from the Ukranian war and turbulence within our government have all contributed to creating an uncertain future for businesses. This means that they need to evaluate their options and look at how they can grow their business despite these challenges.
11. Data Protection
Data protection is another huge challenge facing businesses in 2023. With so much data being gathered when you visit company websites, it’s important to ensure it’s protected and used in a way that is compliant with legislation but also customer expectations.
Businesses have to generate positive engagement online to reassure customers that their data is protected when they visit the company’s websites. The UK is particularly concerned about data protection and security, as evidenced by recent social media scandals and many attempts of hacking through scam texts and online messages.