Staff Shortages and Supply Chain Disruption: How Small Businesses Can Weather the Storm

Transport and logistics

19 November 2021

In the last few months, McDonald's ran out of milkshakes, Nando's had no more chicken and stores big and small have had impromptu closures due to staff shortages.

Initially, these disruptions were blamed on the 'pingdemic' - a term coined to describe the thousands of people being instructed to isolate by the NHS Track and Trace app. However, time has proven that it’s not just the pandemic, but also Brexit and worker shortages that are causing these supply chain issues.

For small and micro businesses, especially those who rely heavily on customer loyalty, the disruption to business and the potential for disappointed customers can present a real business risk. As these challenges don’t seem to be disappearing any time soon, it’s best to have a plan for coping with them.

Minimising supply chain disruption as a small business

Small business owners have so much to manage that the last thing you want is to have a shortage and no back up plan. Here’s a few suggestions for being proactive about supply chain issues:

Create a Business Continuity Plan before you need it

Business continuity planning refers to the systems and procedures that allow businesses to maintain or quickly resume functions in the event of a major disruption. Essentially, business continuity is like having a back-up plan. You can find a template for making your business continuity plan here.

Diversify Suppliers

You’ve heard the phrase ‘don’t put all your eggs in one basket’ and it applies to your supply chain as well! Relying on just one business can create risk for yours, so now may be a great time to look at diversification of your business partners.

Stay on top of Ongoing Brexit Changes

If you import or export from abroad, you’ll need to stay on top of the upcoming changes. The full border controls on the import of goods from the EU will be introduced on 1 January 2022, so it is time to start preparing.

Coping with ongoing supply chain issues

If you’re already in the midst of a supply crisis and find yourself missing some products or unable to deliver all your services, here's a few more reactive ideas for managing that:

Prioritise biggest sellers or revenue generators

If you can't get all your stock on to the shelves, focus on getting out the items you know your customers need most. Use past sales data to inform your choices and help you prioritise.

Use resources more efficiently

Review your processes to see if there are any ways to cut waste or make your supply chain more circular. For example, as steel demand rises, it's becoming difficult to find gas cylinders. The gas is available but the cylinders are not, so industry officials have requested that cylinders be returned so that they might be filled again. Creating a more circular supply chain means that businesses won't be as impacted by issues in a chain.

Ration resources

During the pandemic, we saw limits on the amount of toilet paper a customer could buy in one purchase. This meant that more customers could get what they needed rather than only one customer leaving happy. Rethink multi-buying deals during this time (maybe pause your 'buy two get the third free' offers) and promote smaller portions rather than bigger ones where relevant (push 4-piece chicken nugget meals and remove the 6-piece meals for a short time).

Communicate with staff

All staff members, especially those who are customer facing, should have clear guidelines on any changes that are taking place, how to handle them and how to explain them to customers. Giving your staff the tools to succeed under added pressures will help reduce any further issues.

Damage control with customers

You might experience an increase in customer complaints during this time, but if you handle them well, this isn't necessarily an issue. When a customer complains they’re also giving you an opportunity to retain their business for the future – resolve their complaint successfully and they may buy from you again. Be sure to acknowledge the issue, give an explanation, reassure your customers, and let them know any actions being taken to solve problems.

 

How to prepare better for staff shortages

Many of these supply chain issues just now are stemming from a lack of available or skilled workers, so looking for ways to attract new staff or keep existing staff can help to stop the supply issues at the source. Here are a few ways to prevent or prepare for staffing issues:

Offer Benefits and Development Opportunities

The job searching site Indeed has seen a huge increase in the number of companies offering signing bonuses to new starters to get ahead in the competition for staff. Offering bonuses and other benefits can help attract new staff and offering development or training opportunities can also help you fill skills gaps.

Cross-train employees

Cross-training may allow reallocation of resources should a member of the work force need to isolate. For example, if a customer facing employee needs to isolate, they could be interchanged with an administrative employee. While not as efficient, there is not a total loss of productivity from the affected employee. Employees that can perform in more than one function make the whole business more adaptable.

Encourage vaccinations among staff

While you cannot force anyone to get the vaccine, you can make sure it is easy to get for those who want it. Consider allowing employees the day off with full pay to get their vaccine, let them work from home for a few days after receiving it or create another incentive to encourage more take up. The more staff members that are vaccinated, the less likely you are to have a worker shortage due to mandatory isolation periods.

Look into visa sponsorship

As these shortage issues aren’t purely down to COVID, but also Brexit, consider looking into how visa sponsorship works if you think you'll need specialised staff or skills that are difficult to get from workers that are already in the UK.

 

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