Weak Demand for Companies’ Core Products and Services Contributes to Slow Jobs Growth
Tag Archives: Economic Crisis
Executives have become notably more optimistic about their companies’ and their countries’ economic prospects since mid-April—but the outlook was so poor then that optimism must be tempered.
Over the past six weeks, executives have become markedly more optimistic about current economic conditions and prospects for their national economies, a new McKinsey survey shows. Expectations started out so gloomy, however, that even now, fewer than a third expect an economic upturn this year, and two-thirds expect their nations’ GDPs to decrease in 2009.
Similarly, at the company level, more executives still expect to shed workers than to hire, but the share expecting to decrease the workforce has fallen below half for the first time since January. And a full third of respondents now expect profits to increase in 2009, up 8 percent in six weeks. Furthermore, even though respondents see fallout from the crisis in a variety of financial and nonfinancial measures such as employee morale and the pace of innovation, strong majorities expect those effects to be short-lived.
Executives view their economies as bad but, in a change from recent months, do not see them getting much worse. Government actions have helped, many say. Companies are hanging on, and many are taking long-term actions to cope with economic turmoil.
Executives’ economic expectations, though gloomy, don’t appear to have worsened notably over the past six weeks, according to a McKinsey Quarterly survey in the field from January 27, 2009, to February 2, 2009, during another round of significant layoffs and falling stock prices. Many respondents say government action has made the economic situation better than it would have been otherwise. Looking ahead, more executives say government help should focus on fostering innovation than on helping existing companies or industries. Most companies, respondents indicate, are still coping with the crisis by cutting costs, and many are also making more use of long-term tactics (such as restructuring) suggesting that they see the global economic turmoil as the new normal.
Engaging employees to ensure organizational alignment and commitment is the most important leadership practice to achieve business goals in tough business times, according to more than half of senior leaders and human resource professionals surveyed by Right Management.
Right Management polled over 650 senior leaders and HR professionals in North America to gain insight into their most important leadership practices to achieve business goals in tough times. According to the survey, the most important leadership practices are:
- 51% – Engaging employees to ensure organizational alignment and commitment
- 21% – Clearly defining roles and expectations
- 13% – Making efficient and informed personnel decisions
- 15% – Developing current skill base and capabilities within organization
The weak economy and chaotic financial markets are hitting businesses hard and forcing them to make tough people decisions, said Owen Sullivan, CEO of Right Management. “It’s in times of hardship and uncertainty that leaders are investing more in engaging and aligning their employees to reap the utmost commitment, productivity and focus. Leaders know that it’s only the collective talent of their workforces that will pull them through.”
Sullivan notes that in tough times leaders are reconsidering their priorities to ensure the viability of their organizations. “Leaders are being forced to make very tough business decisions in order to not only survive, but to come out stronger. Leaders need to convey difficult messages that help their workforce understand the rationale for current actions while also instilling confidence and commitment so that objectives can be met.”
This is an article I recently wrote for Des Moines’s Veritas Magazine. With all the uncertainty around us, it is a good reminder to know that some things are unchangeable.
Let me start by first asking a simple question: Do you believe God has a plan for your life? Now, before you rush to answer, I want you to take a moment and search your heart. Do you really believe, in your heart, God has a plan for you? If you are not sure because of your current circumstances of unemployment or dissatisfaction with life, I have great news for you.