UK construction companies collapse in their hundreds as costs rise

Alan Miltz’s famous quote that “Revenue is Vanity, Profit is Sanity and Cash is King” has never been more relevant than within the current post-pandemic UK economy.

As City AM detail in their recent article, ‘Hundreds of UK construction companies are collapsing each month amid rising costs, supply chain disruption and labour shortages.’

‘ “With costs escalating and labour problems intensifying, it’s little surprise that almost a quarter of firms say turnover has decreased and more companies are going to the wall,” said Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown.’

‘“The sector is facing a record number of vacancies with positions waiting to be filled soaring to 48,000 in the August to October period, the highest level for two decades,” Streeter continued. “Added to this volatile mix is the extra cost of Covid precautions.’

This highlights the importance for Construction firms of forming strong partnerships with specialist recruiters, who are more consistently able to deliver the required talent, whilst advising on economic and effective solutions.

The issues currently affecting the UK Construction industry are not unique to this sector.

‘According to government data insolvencies across all industries were up by 88 per cent compared to the same period last year when pandemic support was in place for struggling companies. Insolvencies were up 11 per cent on pre-pandemic levels.’

Within the recruitment sector, we’re not immune to these cost increases, including increased investment in marketing and in talent focussed technology.

There is therefore, a heightened need to ensure that we’re protecting our profit margins and thus we review our revenue models and pricing strategies.

Whilst permanent recruitment solutions may be based on a percentage of rising salaries and packages, does this cover the whole of your business cost increases?

When was the last time you reviewed your pricing model and strategy?

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