Growth Hub could held Devon businesses struggling with recruitment issues and rising costs

Many Devon businesses don't know which way to turn, as they continue to struggle with recruitment difficulties on top of rising costs of commodities, energy and fuel.

Businesses in hospitality and leisure especially, mainstays of Devon's local economy, are continuing to find it difficult to recruit, says Stuart Elford, chief executive of Devon & Plymouth Chamber.

And part of the reason for that is because property is seen to be too expensive and out of reach, dissuading many people on lower incomes from moving to where the vacancies are.

Prior to the war in Ukraine, it had become more common in busier tourist areas of the county to see employers – restaurant and café owners – paying taxi fares for staff to travel-in from locations outside the area, in order to fill vital vacancies.

But now with the rising costs of fuel, even that is becoming difficult to afford for cash-strapped firms.

"It's been just one thing after another," says Stuart Elford.

"No one expected the pandemic, of course, but businesses had to adapt immediately to stay afloat.

"They diversified. They changed their business models to new ones that worked as best they could in that climate.

"They took opportunity from government grants, but their regular clientele largely disappeared during the restrictions, and many staff left, were laid off, and have not returned.

"Many businesses took out loans to help them diversify, to see them over the hump not knowing how long that was going to be. Many used up any financial savings or reserves they had, in the promise of better times around the corner.

"And having quickly adapted to that challenge, the goal posts have now shifted, and businesses are having to change again to adapt to rising fuel costs, and costs of living.

"This time, I fear it'll be the final straw for some. While members of Devon & Plymouth Chamber are three times more likely to survive than those that are not, we will see some businesses throwing in the towel."

But not all, according to Devon County Council, whose 'Growth Hub' helps support local businesses. Some businesses are feeling optimistic on the one hand, but still worried about the future.

Owain Quick runs a car detailing and valeting firm MAD About Detailing, based in Tiverton. The business has been trading since 2014. He's a sole trader and feels his business is ready to take off.

Due to his work load he needs help and thinks he could take on a new member of staff but is hesitant because he's worried that he'll not be able to afford the rising costs in months to come.

He's very busy, but the uncertainty is holding up his business plans.

Ninety seven percent of Devon's economy are small to medium sized businesses, and 90 per cent of those have fewer than 10 employees.

"We see a lot of sole traders and small to medium sized businesses with few employees struggling with this dilemma, whether now is the right time to grow and have their costs grow too," said Cllr Rufus Gilbert, Devon County Council's Cabinet member with responsibility for economic support.

"The uncertainty in not knowing how long and how deep these rising costs will impact on them is holding many back.

"Through our South West Growth Hub, which provides business support and advice to Devon firms, we're seeing a steady increase in the number of businesses looking for additional grants or finance."

Since April 2021, the Growth Hub has supported over 1,200 businesses and many more are reaching out.

"They want to buy new equipment and new machinery. They want to become more energy efficient, for environmental reasons, and to save money in the longer term.

"They're ready to invest, but they're uncertain about the future and rising costs."

Business man, Owain Quick has signed up to the Devon County Council Growth Hub's 'Thrive' support service, to help him with his business plan and to learn how to write applications or bids for additional grants or finance.

He said: "I am very excited to be working with Thrive. I wasn't aware of the programme until I went to my local job centre to see if there was any local support for small businesses like my own.

"One of the team members from Thrive told me about a few local companies that offer advice and support to businesses like mine.

"Through Thrive, I spoke to a few like-minded businesses that were able to advise and support me to help my business grow in these very hard times.

"I am now looking for an apprentice to join me, to learn all aspects of detailing and valeting.

"I'm very grate for Thrive's support and look forward to working with them more in coming months."

Cllr Gilbert said: "We are suggesting to businesses that they look at their current business plans, in light of the current economic climate, knowing what the challenges are right now, knowing what the risks are and the potential gains, and ask themselves whether their current plan is realistic.

"People forget that even applying for business grants or loans require a solid business plan, and without one, they're less likely to be successful. Even writing the bid can be challenging for businesses that haven't applied for funding before.

"Thrive support service can help with business planning, financial planning, support with staff training or recruiting, and the use of digital technologies to help local firms gain a firmer footing to adapt again to these latest challenges."

The council is also working closely with the Federation of Small Businesses, to provide two in-person events specifically for the hospitality and leisure industry in Devon, to discuss and offer support about recruitment and retention of staff.

You can find out more about the two events, on the September 15 and September 29, on the Growth Hub's website.