Credit Management December 2022

THE BIG CASH SQUEEZE
WILL FORTUNE FAVOUR THE BOLD?
creditorservices@menzies.co.uk
menzies.co.uk/creditor-services
With a new political landscape, rising inflation, a cost-of-living crisis
and increasing pressure from HMRC for payments, many businesses
are preparing for a big cash squeeze in 2023. This could push
demand for credit management services to a new high, so how will
the industry fare and could fortune favour the bold?
At a recent roundtable event in
Cardiff, chaired by the Chartered
Institute of Credit Management
(CICM) and hosted by accountancy
firm, Menzies LLP, experts from
across the industry discussed the
challenges and opportunities that lie
ahead for businesses.
During times of economic hardship,
credit managers have a particularly
challenging, frontline role to play in
helping businesses to protect cash
flow, while mitigating financial risks.
However, a strong focus on cash
management and credit control
can also generate opportunities
to increase revenues and boost
profitability.
CHALLENGES LIE AHEAD, NOT
LEAST SKILLS SHORTAGES
Prime Minister, Rishi Sunak, has
warned that the UK is facing a
‘profound economic crisis’ and while
this isn’t a surprise, many businesses
feel ill-prepared. The fall-out from
Brexit remains a major issue for
many industries, particularly those
trading in Europe, driving up costs
and administration and leaving a
legacy of staff shortages that is
impacting productivity. High takeup
of Government-backed loans
during the COVID-19 pandemic,
has left many businesses struggling
to meet their repayments with
reduced revenues and depleted
cash reserves, all at a time of record
inflation and a war in Ukraine,
which is driving up energy costs to
exorbitant levels that are simply not
sustainable for some businesses.
According to delegates at the
roundtable, the biggest and most
immediate challenge that businesses
are facing is the staffing crisis.
Sue Chapple, chief executive of
the CICM, commented:
Members are reporting significant
staff shortages right across
industry sectors. In particular,
businesses note a lack of
graduates and skilled young
people – some of whom are
choosing to delay the start of
their careers. In sectors such as
construction, food manufacturing
and hospitality, reduced access
to non-UK workers is a major
problem.
While sharing examples of best
practice, Nicola Johnson, head of
credit and cash processing at PHS,
explained that credit management
professionals need to invest more
time encouraging workers to develop
their skills and progress their careers.
She said: “We have six workers
about to start CICM qualifications
at the moment, supported by the
business, and we hope that this will
encourage them to stay and further
their careers.” Other firms reported
that more apprenticeships are being
taken on to grow the skills base.
For recruiters serving the industry,
the lack of candidates for jobs in
areas such as credit assurance and
risk data analysis is inflating wage
expectations, which makes it even
more challenging for businesses
to recruit the people they need.
Jason Pallister, managing director
at DCS Credit Management &
Recruitment, said: “Some businesses
are being priced out of the market
by larger companies that are able
to offer more attractive reward and
remuneration packages. Things are
getting increasingly competitive and
unrealistic wage expectations are a
growing problem.”
Referring to staff shortages in other
sectors, Craig Evans, head of new
business sales at credit ratings
provider, Company Watch, added:
“Staff shortages are so serious in
some industries that businesses
are unable to trade and some are
choosing to wind up now, rather than
wait for the situation to get worse.
This is a growing area of credit risk
that our customers are seeking
information about – particularly
regarding the number of winding up
petition applications.”
While there is no silver bullet to the
staffing crisis, employers are aware
that they need to remain flexible and
understand what workers want. Hans
Meijer, EICC director at Coface,
said: “We are recruiting in London
and Watford at the moment and the
demographic of the candidates for
vacancies at each location is quite
different. Understanding this and
staying flexible to individual worker
preferences when it comes to hybrid
working is helping us to attract
the right people. Greater focus on
training and skills development is
also helping.”
Brave | Curious | Resilient / www.cicm.com / December 2022 / PAGE 26