Bouncing Back:Demand Surged as UK Lockdown Eased
Oct 21, 2021 • Features • BigChange • Covid-19 • Leadership and Strategy • EMEA
In this second feature of a series of excerpts from a recent white paper published by BigChange, we have a look at what happened in the field service sector after Covid measures began easing in the UK.
This feature is just one short excerpt from a white paper published by BigChange.
www.fieldservicenews.com subscribers can read the full white paper now by hitting the button below.
If you are yet to subscribe you can do so for free by hitting the button and registering for our complimentary subscription tier FSN Standard on a dedicated page that provides you instant access to this white paper PLUS you will also be able to access our monthly selection of premium resources as soo as you are registered.
Data usage note: By accessing this content you consent to the contact details submitted when you registered as a subscriber to fieldservicenews.com to be shared with the listed sponsor of this premium content BigChange who may contact you for legitimate business reasons to discuss the content of this white paper, as per the terms and conditions of your subscription agreement which you opted into in line with GDPR regulations and is an ongoing condition of subscription.
GROWTH IN TURNOVER, WORKLOAD AND PROFIT ACROSS THE UK FIELD SERVICE SECTOR
Britain’s trades have bounced back from Covid-19 lockdowns and disruption. And they expect more growth in the 12 months to come.
Plumbers, electricians, maintenance companies and other firms with field service staff report that workload, turnover, and profit have increased significantly since Covid measures began easing in July 2020.
In the 12 months since then (August 2020-July 2021), these companies have reported:
- Turnover up by 79% on average (compared with the previous 12 months)
- Workload up by 70%
- Total profits up by 66%
A third of companies increased profits by at least 50%. Three-quarters (74%) increased turnover; a pattern repeated when it comes to demand for work and total profits. One in five has doubled turnover since July 2020.
The sharp bounce back comes after a period (August 2019-July 2020) when Covid-19 significantly affected business activity.
Since then, growth has been particularly strong in the facilities management, fire and safety, hire, and plumbing and heating sectors.
But surging demand is not benefiting everyone. For every strong, profitable business in the sector, another is struggling to keep up – just breaking even or even losing money.
Demand for facilities management, building maintenance, electrical contracting, fire and security, and plant hire services bounced back particularly robustly – each sector recording workload increases of more than 70% year on year.
AVERAGE GROWTH RATES FOR FIELD SERVICE FIRMS
Looking forward, more than eight out of ten firms expect turnover to grow into 2022. One in five (19%) expects to at least double turnover by next summer.
Only 2% expect to be less profitable this time next year.
Overall, the picture is of surging workloads, turnover and profit – albeit from a suppressed start point. Like a coiled spring now released, the sector is growing very fast.
Many businesses will increase prices to help offset increasing costs. Prices charged across the field service sector rose by 47% in the last 12 months and are predicted to increase by a similar amount over the next year.
However, there are still concerns that growth in profit will continue to lag behind the rise in turnover, and that predicted profit increases will not be enjoyed uniformly across the sector.
13% of field service firms say they are already struggling, and fear that they could go out of business in the next 12 months as costs continue to rise and Covid-19 support measures are phased out.
This includes many that experienced booming demand last year, but couldn’t pass on their increasing costs to customers in the form of price rises.
STATE OF THE FIELD SERVICE SECTOR
- 22% of field service leaders told researchers their businesses were performing incredibly well, with good profit and growth prospects. This equates to 276,000 firms nationwide
- Half (50%) of these firms experienced increases in demand for their services of between 10% and 99% over the last 12 months, while another quarter (26%) saw workloads double
- On average, these strong growth businesses have seen workloads rise by 97% while achieving similar increases in turnover (99%) and profit (100%)
- These champion businesses increased employee numbers by 58%, prices by 62% and investment in technology by 76% in the last 12 months
- 26% of leaders, the equivalent of 323,000 UK firms, reported their businesses were succeeding in making a small profit each year
- Workloads increased by 57%, on average, ahead of both turnover (49%) and profit (43%)
- These businesses plan to increase prices by 42% over the next year to offset rising costs
- They expect to increase employee numbers by 37% and investment in technology by 42% in the year to July 2022
- A further 26% of field service businesses – 330,000 across the UK – broke even over the last year
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On average, these Breakeven Businesses put up prices by 31% to stay on top of costs, and increased turnover by 57% from a 39% increase in workloads
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Employment in these businesses rose 26% on the year and is predicted to grow at a similar rate (29%) over the next 12 months
- The businesses plan to increase their investment in technology by 36%
BIGCHANGE'S GROWTH MATRIX
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Around one in every eight leaders (13%) said their firms were currently losing money but expected to be able to turn their fortunes around over the next year. We estimate that 161,000 field service firms nationwide are in this situation
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Increases in workload of 46% in the last 12 months were met by a 55% increase in employee numbers
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83% of these businesses said higher labour costs had hurt their businesses last year.
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Another 13% of leaders told researchers their firms were struggling to the extent that they could go out of business within the next year. This equates to a further 161,000 businesses across the UK
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Their struggles aren’t due to a lack of demand. Struggling businesses took on the highest average increases in workload (146%) and turnover (151%) of any segment
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However, meeting this demand required a 92% increase in employees, a factor that 91% price increases couldn’t offset
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97% of strugglers said they were severely impacted by Covid-19, while the rising cost of materials, fuel and people were negative factors for more than 80% of these firms.
This feature is just one short excerpt from a white paper published by BigChange.
www.fieldservicenews.com subscribers can read the full white paper now by hitting the button below.
If you are yet to subscribe you can do so for free by hitting the button and registering for our complimentary subscription tier FSN Standard on a dedicated page that provides you instant access to this white paper PLUS you will also be able to access our monthly selection of premium resources as soo as you are registered.
Data usage note: By accessing this content you consent to the contact details submitted when you registered as a subscriber to fieldservicenews.com to be shared with the listed sponsor of this premium content BigChange who may contact you for legitimate business reasons to discuss the content of this white paper, as per the terms and conditions of your subscription agreement which you opted into in line with GDPR regulations and is an ongoing condition of subscription.
Further Reading:
Read more about Leadership & Strategy @ www.fieldservicenews.com/leadership-and-strategyRead more about the impact of COVID-19 in the Field Service industry @ www.fieldservicenews.com/covid-19
Read more about BigChange on Field Service News @ www.fieldservicenews.com/bigchange
Learn more about BigChange @ www.bigchange.com
Follow BigChange on Twitter @ twitter.com/bigchangeapps
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