Although the official date of Brexit was recently postponed until 31st October 2019, organisations across the country are continuing to prepare for the possibility of a ‘no-deal’ scenario in the coming months. And, of the various methods businesses are using, stockpiling has quickly emerged as a popular practice to reduce no-deal risks. Stockpiling—which entails importing and storing more materials and goods than that of typical business requirements—is being viewed as a possible solution to the rising concern of Brexit-related border uncertainty, import taxes and supply chain delays. As a result, over 20 per cent of UK employees have reported that their workplace is stockpiling to prepare for Brexit, with 4 per cent expecting their organisation to start doing so in the near future.
While this practice may seem like a perfect way to avoid business disruption or operational failure in the event of a no-deal, stockpiling comes with some serious risks. In fact, nearly 75 per cent of employees who work for organisations that have started stockpiling believe it has had somewhat negative impacts on key business factors, including:
- No room for growth—66 per cent of employees reported that stockpiling has limited their organisation’s expansion abilities.
- Employee issues—60 per cent of workers believe that stockpiling adversely affected their organisation’s plans for recruitment, with 51 per cent feeling the same in regard to promotion possibilities. What’s more, 64 per cent of employees say that they have missed out on pay rises due to stockpiling.
In light of these concerns, it’s crucial to implement this guidance if you plan on using stockpiling practices within your workplace:
- Manage your cash flow—As you allocate extra funding for stockpiling, this could create an unbalanced budget that leaves you empty-handed when it’s time to make payments on other business expenses—including rent, payroll and insurance cover. With this in mind, more than 20 per cent of brokers expect to see an increase in the number of premium finance policies purchased this year. If you are concerned about managing cash flow as you prepare for Brexit, contact us to discuss premium finance options.
- Alert your broker—Most importantly, stockpiling can cause major concerns with your insurance cover in the event of a claim. When stockpiling, it’s vital than you communicate with your broker to update your policy and increase your sums insured. Otherwise, your policy won’t be able to help cover your additional stock if you make a claim, leaving you with significant financial loss.
For more guidance on insurance solutions for uncertainty, such as premium finance or trade credit cover, contact Buckland Harvester today.