Category: Management & Leadership

This blog has recently discussed a number of positive indicators concerning the trajectory of the U.S. economic recovery, including an uptick in manufacturing activity and rising consumer confidence.

Today, we’ll take a look at how the positive trend in public confidence regarding the economy may be affected by the most recent ADP national employment report, which was released on October 3.

The report showed a significant increase in U.S. nonfarm private sector employment, with a total of 162,000 new positions created.

MarketWatch reported that stocks gained ground in the wake of the release of ADP’s job creation numbers, which exceeded many economists’ expectations. The news source cited an increase in several major indexes, including the S&P 500, Dow Jones Industrial Average and Nasdaq Composite.

The Department of Labor’s Bureau of Labor Statistics (BLS) is scheduled to release its monthly employment situation report on Friday, October 5, which may have an impact on investor confidence. Particularly over the course of the past few months, BLS data has often varied considerably from the estimates produced by ADP.

According to MarketWatch, one of the prime reasons for the wide variation is that ADP’s research only looks at private sector employment, while the BLS also factors in any change in government employment, which has been shrinking significantly due to budget cuts.

The bottom line for businesses

Ultimately, the question facing many corporate leaders is whether or not to prepare for expansion. With the trajectory of the economic recovery remaining somewhat tenuous, it is unclear to companies how hiring decisions should be handled. There is a compelling reason to balance the desire to keep commitments minimal with the need to be prepared for an uptick in economic activity.

One thing remains clear. When businesses are looking to fill critical positions such as CFO jobs, quality is of the utmost importance. Professional recruiters can help any company conduct a fast, effective financial professional search.

In a recent report on global economic conditions, the International Monetary Fund (IMF) asserted that the realization of the “fiscal cliff” – a combination of drastic spending cuts and considerable tax increases set to take effect at the end of the year – would most likely lead to a fresh recession.

Many other economists, such as The New York Times’ Paul Krugman, have also voiced concerns about the effect of withdrawing money from the economy so rapidly. Among this group, the consensus is that maintaining growth continues to be the most important priority for current policy-makers.

However, Peter Schiff, president and CEO of Euro Pacific Capital, has a different take on the issue, asserting that the short-term pain of withdrawing federal funds from the economy will be worthwhile if the nation can ultimately emerge in a more solid fiscal situation.

“Our economy is so screwed up from years and years and years of bad monetary and fiscal policy that it’s going to painful to correct that problem, but we have to do it,” Schiff told a reporter from Yahoo! Finance’s Breakout blog. “We can’t keep avoiding the pain and in the process making the problem worse, because then we’re just going to have even more pain in the future to fix an even bigger problem.”

Lawmakers still working to resolve impasse on taxes, spending

Earlier this month, The New York Times reported that a bipartisan group of Senators is working to design a comprehensive, long-term plan that would cut the deficit without the blunt force trauma that going over the fiscal cliff would deal to the fragile economic recovery. Top Senate Republican Mitch McConnell told The Times that the final shape of any deal would depend heavily on the results of next month’s election.

During this uncertain time, sound financial leadership is extremely important for all companies. Recruitment firms can help corporations conduct effective financial professional searches.

We recently discussed the ongoing fiscal crisis in the eurozone. As events have dragged on, there has been an increasing amount of speculation regarding the prospect that Greece – the most troubled nation in the currency union – will abandon the euro.

At the recent annual meeting of the International Monetary Fund in Tokyo, Swedish finance minister Anders Borg said he believes it is “most probable” that Greece will leave the eurozone and observers shouldn’t rule out the idea that it will happen within the next six months.

However, few people have come forward with a practical plan for separating Greece, or any nation, from the eurozone. When negotiating the underlying treaties, the euro’s founders did not establish a process for countries to depart the currency union.

The Boston Globe recently looked at a hypothetical plan put forward by Roger Bootle, head of research firm Capital Economics. Bootle’s proposal has one goal – creating an independent Greek financial system without causing, or allowing, significant capital flight prior to the conversion.

Bootle concedes that his plan would be particularly painful for poorer Greeks, but he says he believes that not taking action would only prolong the period of difficulty and lead to greater hardship.

Barry Eichengreen, a Berkeley economist, told The Globe that he was highly skeptical a plan along the lines of Bootle’s would be effective in abating the current crisis. He concedes that the plan is “beautifully crafted,” but asserts that even careful craftsmanship doesn’t necessarily mean the plan is realistic.

However, Bootle points out that, just because his plan leaves a number of messy, unresolved questions, that doesn’t mean there are any alternatives that would offer a problem-free resolution.

Whatever action is undertaken by European governments, it is clear that companies with interests in the continent will have to keep a close eye on new developments and react accordingly. Financial project consulting services can provide a critical aid in this process.

On October 25, CareerBuilder released its annual assessment of retailers’ hiring plans for the upcoming holiday season. Traditionally, this time of year brings a significant, but short-term, bump in employment as stores expand their staffs to handle extra traffic.

This year, the number of positions being added by employers is up considerably from last year’s figures, according to CareerBuilder’s report.

Harris Interactive surveyed more than 2,400 employers regarding their hiring plans to get the data. Thirty-six percent of respondents indicated that they plan to expand their workforce for the holiday season. This represents a 29 percent increase over 2011.

In addition, 39 percent of those conducting extra seasonal hiring intend to transition some of the new workers into permanent roles.

CareerBuilder CEO Matt Ferguson linked the strong seasonal hiring plans with rising confidence and asserted that the season should see an overall surge in economic activity.

“An increase in consumer confidence is helping to fuel the best seasonal hiring the U.S. has seen in recent years,” said Ferguson. “While the bulk of seasonal recruitment falls within the retail space, companies across industries are hiring for a wide range of positions to support their business operations as they wrap up the year.”

Even a strong holiday season won’t eradicate economic uncertainty

We’ve recently discussed a number of other indications that the economy is strengthening. However, we have also discussed ongoing challenges confronting sustained global growth, including the fragile situation in the eurozone and the looming package of spending cuts and tax increases referred to as the “fiscal cliff” in the United States.

In this time of uncertainty, it is more crucial than ever that companies have sound fiscal expertise on their leadership teams. Filling CFO jobs and other high-level positions is always a delicate process, but in this tumultuous economic climate, it is clear companies do not have time to pour into a protracted financial professional search.

Recruitment firms can help businesses conduct a fast, effective search.

We recently discussed a number of reports that show a strengthening U.S. economy. Both the ADP National Employment Report and the Employment Situation Summary put out by the Bureau of Labor Statistics (BLS) reported that there was a net increase in jobs last month.

In addition, the job creation figures for the previous two months were revised upwards to reflect uncounted employment. Despite these gains, some observers may have been put off by the fact that the national unemployment rate increased slightly in October.

However, there is evidence that the main reason for this shift is that more Americans are looking for jobs. The Boston Globe reports that nearly 1 million workers have reentered the labor market since September.

This is a positive sign. The Globe spoke to Kenneth Rogoff – an economics professor at Harvard University – for further analysis. He explained that these developments fit into the pattern of a “normal recovery.”

“That’s part of the process,” said Rogoff. “People start to smell jobs and come into the workforce.”

Recruitment firms help companies identify and evaluate leading candidates

Business leaders’ spirits may be buoyed by the range of signs that are pointing to a strengthening economic recovery. However, high-caliber talent continues to be hard to come by. There will always be a need for companies to put an emphasis on quality when conducting an executive or financial professional search.

Leaving CFO jobs or other important positions vacant for long periods during a protracted search can prove disruptive for a company. Working with professional recruiters can help businesses quickly connect with leading talent, evaluate individual candidates and recruit the right professionals for their open positions.

Despite lagging unemployment numbers, many in the business world are still somewhat optimistic that a sluggish economy is on the verge of improvement, according to a recent survey of second quarter CFO attitudes by GE Capital.

Although CFOs expressed concerns over business costs, it appears as though these worries peaked last quarter. The number of CFOs planning to hire workers increased six basis points to 74 percent, while 81 percent now expect their profits to stabilize or improve – eight points higher than the first quarter.

“Mid-market CFOs are more optimistic than six months ago, despite the European fiscal crisis and inconsistent job growth,” GE Capital Americas president and CEO Dan Henson said in a press release. “A larger majority sees top-line growth and stable or better profits this year, and more will be hiring. These companies have access to affordable capital, which in 2012 is most likely to be targeted for investment to finance growth and to purchase equipment.”

Despite optimism on the mid-market side – businesses with an average annual revenue of $143 million – small business executives experienced a drop in optimism last month. Last week, the National Federation of Small Business released its March small business optimism index, which determined that positive business sentiment fell from 94.3 in February to 92.5 in March. Contained within this drop is a leveling off of feeling regarding hiring, which had increased for six consecutive months.

As CFOs continue to plan for the rest of this year, those who have the means to hire new employees should turn to headhunting firms with experience identifying talented financial professionals. Whether recruiting for auditing positions or filling accounting, tax and corporate vacancies, a professional recruitment firm can expand the pool of qualified candidates and expedite the process.

For those familiar with the business landscape, the last few years have been marked by companies simply trying to survive through any means necessary. Whether this means laying off employees or cutting back key services, business executives have been required to make difficult austerity decisions. As economic conditions have improved, however, employees are becoming more mobile and companies are filling their staffs with high-quality workers.

Writing for Ere.net, human resources expert Dr. John Sullivan cautions employers that they could be left on the sidelines as the war for talent escalates. The long-term implications of not hiring top industry talent are dire and could set a company back several years.

“To those and others that may have forgotten what it was like [during the first talent war in 1999], remember that even though talent management received a great deal of attention and boatloads of money, it was not a good time,” Sullivan writes. “If you weren’t prepared, days were long and hectic and even with unlimited resources, it was a struggle to hire and retain even mediocre workers.”

This iteration of the talent war may not be as forgiving to companies that are unable to identify and retain the most talented workers. An investment in a new employee or the retention of a long-term worker enhances an organization’s human capital, which, if maintained correctly, will benefit the company down the road. Higher up-front hiring and training costs can be justified if employees remain with organizations for a significant amount of time.

The long-term thinking that is required of hiring managers should also be utilized by CFOs and financial executives who are partially responsible for bolstering their talent bases. When searching for talented accounting and finance professionals in this highly competitive atmosphere, organizations should seek the assistance of professional recruiters, which can prove to be vital allies in the war for talent.