- About Us
- Contact Us
By Andrew Griggs, Kreston Board Director and Senior Partner of UK member firm Kreston Reeves.
In February, the Institute of Chartered Accountants of England and Wales (ICAEW) published its quarterly Business Confidence Monitor. The survey of 1,000 accountants working in businesses across the UK shows a pessimistic picture. Business confidence, whilst improving slightly, remains firmly in negative territory.
Put bluntly, businesses crave certainty and that is in short supply. Change and uncertainty are, it seems, the new normal.
The ICAEW’s Business Confidence Monitor also showed a more cautious approach from businesses to long term investment, and economic data shared at a recent breakfast briefing points to suppressed – and very modest – wage growth.
The picture is complex and extends beyond the looming Brexit deadline.
Organisations are cautious as we are fast entering what has been coined the ‘fifth industrial revolution’; a revolution driven by technology, and one which will be faster, more scalable and adopted by more people than perhaps all previous industrial revolutions. Everything will be more readily available and will make our lives simpler and faster.
Businesses of all sizes are driving this revolution, but they too will feel its impact. The rising influence of technology on all aspects of society is influencing our perception of value – it must be cheaper because it can be made faster and in greater numbers using new technology.
However, the ICAEW Business Confidence Monitor also shows input prices rising by some three per cent yet with sale prices remaining static. The cost of business is increasing, and these costs cannot be passed on to the customer. The pressures of profits today make long term investment a bigger challenge.
At a recent London-based robotics event, attendees were asked if their job existed when they were at primary school – 67 per cent said “no”. [2017 Outsource Magazine.] A study by McKinsey in the summer of 2017 showed that 60 per cent of the workforce could be replaced by technology that exists today. Both are sobering statistics.
Generation Z, sometimes called the ‘IGen’, are now replacing millennials as the youngest members of the workforce. Born in the mid-1990s they have grown up managing their personal brand on Instagram, SnapChat and other social media platforms. The very latest technology is a natural part of their lives.
They are independent and competitive, happy to work alone and to be judged on their own merits. Honesty and transparency are demanded from their peers, the brands they choose to engage with, and from future employers.
Consequently, they relate more easily to an individual brand, are entrepreneurial and more likely to step out of the big corporate environment to explore new workplace experiences. Portfolio careers already commonplace will be normal.
And unlike the calls of the 2000s for a greater work-life balance – something accountancy firms have worked hard to achieve – Generation Z look to work-life integration where the two are seamlessly blended to suit their own needs.
Employers today are having to manage a workforce with very differing needs – the older Baby Boomers approaching retirement, Generation X in senior management roles, Millennials and now Generation Z.
This leaves businesses and their advisers in uncharted territory. Employers of tomorrow will at the very least have to adopt lenient working practices. They will have to accommodate a generation with continued learning, development, the latest technology and challenges to hold on to them.
Customers too are looking for greater value in all they do and buy, and brand loyalty wears thin. With technology changing the way we live and do business, and with unemployment at its lowest for many years, organisations are having to think carefully and in many cases re-prioritising their investments.
Whilst capital investment may continue to be depressed, businesses are re-deploying their profits. They are nervous of investing in the wrong area. Businesses are showing a higher priority in developing and supporting staff and experimenting, especially in IT systems and processes, to improve tomorrow.
Brexit is of course a contributing factor to a lack of business confidence, but we mustn’t forget the impact of both the fifth industrial revolution and the demands of a very different workforce.
So what should businesses do to embrace these challenges? The traditional mantra has been to ‘understand your client’. Businesses if they do not already do so need now to ‘understand their staff’. Listen to what your staff at all stages of their career have to say and where possible act upon it. Understand too the technology that is available today that will affect the way your business works tomorrow. With change being the new normal businesses will need to continuously experiment and try different ways of doing and running their business. Those that do not may not last.
Accountancy firms are having to address these very same problems. We are well-placed to take that step back from a clients’ business and provide the independent and impartial insight businesses need. Scenario planning where the impact of future change is played out today does help businesses prepare for tomorrow.
Businesses are not reluctant to invest, but they are taking their time before making long-reaching decisions. They are also investing much more in their workforce and that cannot be a bad thing.
Artificial Intelligence (AI) has been garnering a lot of media attention of late. And for good reason – its potential
Earlier this month, the Senate voted in Donald Trump’s controversial $1.4 trillion tax reform bill by the narrow margin of
To say that there’s been a backlash against globalisation in recent years would be an understatement. From demonstrations in France
“May you live in interesting times” goes the Chinese expression. In fact, it’s actually more of a subtle barb to
Earlier this month, the Slovenian Prime Minister, Miro Cerar, stated that he “want[s] to position Slovenia as the most recognised
In the UK, they’re known as Generation Y, in Germany Generation Maybe, and China has labelled them as the generation
Rodney Sutton, head of manufacturing at Kreston Reeves, recently shared his thoughts on the UK manufacturing industry following the referendum
The adoption of international accounting standards has brought many benefits to the private and public sectors. This being said, there
Remote working is becoming a way of life for many professionals and the ability to work in a variety of
A common global language for business affairs, IFRS Standards are required by more than 120 jurisdictions in the world. Recently,
Automated technologies and artificial intelligence in our society will challenge many professions in the future. Some of them may be
Crowdfunding is still relatively new but should still be considered as a viable source of equity. Nowadays, it is providing
A legal amendment to the Finance Bill recently accepted by the UK government may pave the way for big changes
In the business world, there are bumps on the road and financial setbacks. In this situation, it is easy to
Day by day, technology is becoming an essential part of our lives, as the way we manage our financial life,
A new generation is coming to challenge the market. The Millennials make up a quarter of the US population and
Managing change is one of the biggest challenges for businesses as it requires a huge effort from managers and organisations
Sustainability reports are released by companies and organisations of all types, sizes, and sectors, from all over the world. A
Accounting is an indispensable tool for entrepreneurs to manage their business. The data provided by competent
Thinking about the risks involved in business has become an essential part of an enterprise’s strategy. Risk management enables organisations
When a business does not achieve its expected results, it may be time to think about implementing change. In these
The Financial Times recently reported the dispute in the courts between the UK supermarket chain Sainsbury’s and MasterCard. The Competition
For many, the accounting profession may not seem the most attractive in the world. But with technology and innovation at our hands, this is about to change.
By following these five steps, communication has everything it needs to flow better, regardless of where your business is located and where the people you
The need to go global is something that has emerged over the past decade and promises to challenge business for the next coming years.
Recently a considerable change in the SME market was announced through business news on the internet. The Big Four have
There are five topics that we must remember when dealing with working personal relationships in international business…
Slowly, one of the last socialist countries in the world is preparing to make changes to its economy, but how will this be done?
Developing countries attract the attention of investors by offering good opportunities and new markets, making them attractive for anyone thinking of expanding their
Through a mobile app, a small business can promote its brand, products, and services, expand its sales channels, interact with the target audience and get
Last month, experts at the Milken Institute Global Conference in Los Angeles looked at certain megatrends and predicted several economic scenarios for 2040 to
Your browser (Internet Explorer) is out of date.
It is no longer supported by Microsoft and therefore may not display all features of this and other websites. Learn how to update your browser here