The Collins Dictionary’s word of the year for 2022 was “permacrisis.” As the director of Collins Learning, Alex Beecroft, puts it: “The word “sums up quite succinctly how truly awful 2022 has been for so many people.”

However, the truth is that we’ve been experiencing an extended period of extreme change and insecurity long before 2022. And now that we’re nearing the end of 2023, the finish line doesn’t quite yet feel in sight.

From the effects of climate change and international war to political upheaval, the challenges we’re facing today are multiple and intersecting. For businesses, navigating this perpetual state of instability is a demanding task. Our recent Permacrisis report highlights the issues. Here, we look at the impact on businesses across the UK.

A new burden on IT departments

In the permacrisis era, IT decision makers have become strategic partners and play a pivotal role in enabling businesses to adapt, survive, and thrive. However, they’ve also faced exceptional pressure and businesses’ digital solutions have been tested. During the Covid-19 pandemic, for example, the onus was suddenly on IT teams to facilitate the rapid mobilisation of a remote workforce.

To gain an insight into the impact permacrisis is having on organisations and their IT teams, 8x8 surveyed over 550 IT decision-makers in UK businesses across multiple sectors.

The impact of permacrisis

If your business has been struggling with endless crises, you wouldn’t be alone. From our research, an overwhelming majority of respondents (96%) agreed their organisations had experienced an extended period of instability. Inflation, Brexit and the Covid-19 pandemic were ranked as the top three issues impacting businesses.

Inflation

Inflation was voted the leading issue with 64% of respondents agreeing it contributed the most to instability and uncertainty.

This is, perhaps, unsurprising. For businesses, when inflation is out of control, it can affect everything from utility and marketing costs to a business’s ability to budget and forecast for the future.

Varying degrees of disruption in different industries

Nonetheless, there were stark differences across sectors, with some feeling the impacts of inflation more intensely. An overwhelming 80% of manufacturing businesses chose inflation as the number one issue impacting their industry. Manufacturing costs were the first to be hit by rising energy prices, affecting production and the costs of materials along the entire supply chain.

According to the UK Office for National Statistics, the manufacturing industry reported the highest percentage of businesses experiencing global supply chain disruptions due to economic challenges in 2022. Likewise, research in the US by the National Association of Manufacturers found that more than three-quarters of manufacturers felt that rising material costs were a principal business challenge—in fact, over 53% noted that steeper prices were making it more difficult to compete and remain profitable.

On the other hand, sectors that don’t buy and process goods, but instead, deliver “people-powered” services like public sector organisations, are less impacted by inflation.

Covid-19

Next up, the Covid-19 pandemic was ranked the second leading issue impacting businesses in the UK. The pandemic saw entire sectors like hospitality and travel overhauled, considerable pressure on frontline services, and entire workforces forced to work remotely. From our research, businesses with a large labour pool that provide services to citizens, such as public and health sectors, felt the effects of the pandemic more acutely.

A compounding issue exacerbated by Covid-19 was the Great Resignation, which affected a fifth of organisations. The pandemic contributed to burnout and behaviour change, with many employees demanding greater flexibility and a better work-life balance. In the UK, the peak of the Great Resignation was in the second quarter of 2022, when job-to-job resignations reached a record 442,000. As a result, businesses have needed to reshape the way they work to retain and attract staff.

Brexit

The Brexit referendum in 2016 may seem a while ago, but its effects continue to be felt by businesses across the UK. It was the third most pressing issue highlighted by IT decision-makers in our study.

In particular, Brexit has impacted companies that export across Europe, creating new complexities in trading. A recent survey by the British Chambers of Commerce found that half of small businesses are finding it harder to export to the EU. Likewise, the UK has lost 330,000 workers, which has particularly impacted the transport, hospitality and retail sectors.

Internal factors

On top of these external crises, internal issues intensify pressure on businesses. Technology crises such as a server outages or cyberattacks and financial crises, including drops in demand and increased competition, were highlighted among the challenges organisations have struggled with. Unsurprisingly, dealing with constant waves of crises has had a physical and mental toll on our workforce. Indeed, more than half of the people we surveyed said that they and their colleagues are feeling more fatigued than they were three years ago.

The need for change and digital solutions

If there are any positives to take from the permacrisis era, it’s the valuable lessons businesses have learnt. Experiencing multiple challenges and extreme uncertainty has exposed the areas that need to change to future-proof organisations. Digital transformation, cloud communication technology, and crisis management plans are essential for businesses looking towards building up their resiliency for when future problems arise.

To improve your businesses’ ability to tackle crises, download 8x8’s whitepaper, Permacrisis: a view from the IT frontline.