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Confidence falling, with good reason

According to the Household Finance Index 30% of people are stating their finances have worsened over the last month. It’s not just householders suffering, though: it seems both the high street and the public sector are also under the cosh.
 
There’s not much cause for optimism elsewhere. Take Woolworths. It may be 18 months since the much-love chain went bust, but some 40% of its former stores still remain empty. That’s 300 disused shops – many of them in prime locations. Of the ones that are occupied, it’s cheap and cheerful all the way - about a quarter are running as pound shops, while 60 stores have been bought by value food retailer Iceland. 

Even though the public sector spending review has yet to get properly under way, the businesses which service the public sector are already feeling the pain. The number of insolvencies of public sector suppliers has already risen by 50% this year, with 168 businesses going bust between January and June, compared to 114 in the first half of 2009 - and that's before the cuts. 

And for every failed business, there are many more which are in less severe – but still serious – trouble. Some big players, too – the likes of Connaught, the social housing maintenance group, which is now in emergency talks with lenders on a possible debt-for-equity swap which could ‘wipe out’ its shareholders, and Cable & Wireless, the providers or communications services to corporations, local authorities and government bodies, which saw its shares plunge 17% in July after warning spending in the UK public sector had ‘slowed very significantly’. 
 
We have written previously about the inter-dependence between the public and private sector and if the hatchet comes out in the October spending review then 2011 will be a lot tougher than 2010.

 
Scary times, with unemployment set to rise again.
 

Author: Chris Slay 

Plugging Skills Shortages.

Evolution of market development, in a world that is increasingly small in technological terms. will mean that there are ebbs and flow in skills demand locally , nationally and internationally.

There will always be a role for agencies in bringing together the concerned parties whether it is provision of an inanimate commodity or a form of human resource.

It is very rare indeed that the skills gaps can not be plugged, if the price is right, but market forces will prevail and shortages will be be reflected by higher prices and it is essential that the buyer identifies the skills they want when looking for people to hire.

If you want trained people the price will be higher. If you want on the job experience, the price will be higher. If you want fluency in English the price will be higher. Recruitment of overseas workers can plug the skills gap but should be seen as an alternative source of labour, not cheap labour.

A classic example is the care industry. Here we have high demand, but low local supply as many find the working environment unattractive and antisocial with long hours and low pay. The gap was filled from around the world, attracting in people from the the Indian sub continent and the far East and and Eastern Europe, especially Bulgarians and Romanians.

The government then increased demand by wanting more care at home but at the same time cut out access to traditional supply sources and this has resulted in the cost of labour rising as now the only viable source is from Eastern Europe.For many care operators they have had to bite the bullet and accept labour input rises way above the price of inflation and in some cases into double digits. Operators are at the same time being asked by local authorities to either hold or reduce the fees they charge.

It simply doesn't add up at present and the Care Industry faces increasingly challenging times ahead.

 

 

Author: Chris Slay

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