Faced with the crisis, companies lack responsiveness

All are affected, but how many react? By taking what measures? Three surveys, at the global, Belgian and Walloon levels, come to the same conclusion.

How react, or forget to react, companies in the face of the crisis? Several organisations have been polling business leaders about it in recent days. With different angles of view depending on whether their samples were global, national (Belgian) or regional (Walloon). On all three floors, the same conclusion: they don’t do enough.

“Our survey reveals that raising selling prices is too often the only concrete measure taken by business leaders.”

Mark Ernots

Head of Advisory, Grant Thornton Belgium

At scale you globe too few companies are taking action to protect themselves against galloping inflationpoints out the consulting firm Grant Thornton which interviewed leaders from 28 countries. Faced with rising wages, prices of raw materials, energy and transport“raising selling prices is too often the only concrete measure adopted by business leaders”, notes Mark Ernots (Grant Thornton Belgium). More surprisingly, if 52% of companies increased their prices to compensate for inflation, 35% made it beyond the level of inflation.


share of companies that raised their prices above inflation

35% of companies surveyed by Grant Thornton (28 countries) have raised their prices above the level of inflation.

In any case, this measure alone will not be enough, adds the study. It will be necessary to combine a whole range of reactions, such as reducing its dependence on certain customers and suppliers, improve the configuration of its supply chain, prioritize products and services with the highest added value…

Economic unemployment

First observation, therefore: the high degree of inaction contractors. At Belgian level, the human resource services group SD Worx asked 573 SMEs about the measures they plan to take in the face of rising costs. This gives us a more pragmatic view. To reduce labor costs, one out of five Belgian SMEs will no longer replace, or less, departing employeeswhile 13.4% of them do not rule out fire and that 13.2% will resort to economic unemployment.

To reduce their energy bills, 44% will lower the temperature in their premises and almost a third will invest in solar panels and insulation. A minority also think of teleworkthe reduction of travel, as well as small cost-saving measures.

Preparing for future crises too

To the Solvay Brussels Schoolthe teacher’s team Marek Hudon leaned over Walloon companies in the face of this crisis and more broadly in the face current and future crises. She highlights that the current labor shortage increases their vulnerability. Failing to find candidates, “companies lack the means – especially human resources – to anticipate and prepare them for crises”, observes Marek Hudon. This is an element of the problem that we had left aside in the hard of the health crisis: human capital, in sufficient numbers and skills.

“Companies lack the means – in particular human resources – to anticipate and prepare them for crises.”

Marek Hudon

Professeur, Solvay Business School of Economics and Management (ULB)

energy costs and the risk of gas supply disruption also give a lot of worries to the bosses in the south of the country; the “gas” risk would affect one in three companies, with 13% of them facing the prospect of having to stop activity.

The survey goes a step further by questioning the leaders on their level of preparedness for future crises. Reference is made here to the scarcity of resources, cybercrime and climate change. Among those who anticipate many question their business model (30% of the shares) and/or seek to acquire new knowledge (24%). Many of them pass the buck to the government. By claiming clarified climate ambitions, more flexible taxation and better anticipation of crises. But on this last point, they probably take their dream for reality…

The summary

  • How are companies reacting to the crisis? Three surveys of business leaders come to a similar conclusion: they are not doing enough.
  • Raising selling prices is the measure most practiced on a global scale, but will not be enough, according to Grant Thornton.
  • Economic unemployment and redundancies are envisaged by 13.2% and 13.4% of the Belgian companies questioned by SD Worx.
  • The shortage of labor increases the difficulties, underlines the study of the Solvay Business School.

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