Opinion
A sector snapshot Surveying commercial intermediaries as restrictions lift Ian Aitchison Managing Director Close Brothers Business Finance
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s the pandemic continues to dominate our lives, we surveyed brokers across the UK on a range of issues, from current trading conditions and business challenges to recruitment. The results reveal a glimpse of life on the frontline for commercial intermediaries. Brokers are, in the main, optimistic about the UK economy, with 39% confident the economy will quickly return to growth; a further 38% are more cautiously optimistic, thinking the worst is behind us, but it will be a slow path to prosperity. These results are in line with the wider UK SME market, with scores of 36% and 35%, respectively. Sentiment on growth among brokers remains strong with over half (53%) expecting to grow in 2021 while a further 35% anticipate plateauing; only 10% think they will contract. These figures outperform the general SME population, where 38% hope to grow and half to stay the same. In terms of business priorities for 2021, growth is again the main theme for 57% of brokers and for a quarter it is to continue to trade at current levels. For 40% of brokers, total remote working has become the standard operating model during the pandemic. Despite the severity of the pandemic on hiring levels, close to a third (29%) of brokers recruited new staff. These are strong numbers – to put this into context, in the three months to January 2021, there was an average of 599,000 job vacancies in the UK, around 208,000 fewer compared with the same period in 2019. From the first quarter of 2020, job vacancies fell from 796,000 to 343,000 in the second quarter of that year, a huge drop brought about by the pandemic. Recruitment was frozen for 45% of brokers, while a further one in five furloughed staff, and 7% were forced to make redundancies. 50 | NACFB
Amidst the difficulties of training a remote workforce, 60% of brokers continued to upskill their staff, with a further 16% limiting training to better understanding government schemes. The remaining respondents were forced to cut their training budget because of financial pressures. While many sectors have been hit hard by the pandemic, few have suffered as much as hospitality, with brokers overwhelmingly in agreement. Four in every five brokers pointed to hospitality when asked which sector they believed had been hit hardest by decreases in asset valuation. The expectation from some quarters was for a significant uptick in fraud and financial crime following the launch of the government loan schemes, but brokers haven’t, for the most part, seen a noticeable increase. That being said, 30% did report either a substantial (5%) or modest (25%) increase, but this has, fortunately, had negligible impact on brokers’ business levels. The pandemic has caused many firms to think more long-term, and brokers are positioning themselves to work in partnership with their customers. When asked whether they were thinking about looking into or developing other areas of their business, brokers said they would start planning for future risks that business owners may face. On a more personal level, many were also planning for retirement and establishing a tax efficient plan for the future.
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For 40% of brokers, total remote working has become the standard operating model during the pandemic