Business executives are optimistic that 2010 will bring an increase in both revenues and hiring. That’s according to the annual Economic Survey by Naviga Recruiting & Executive Search, which found that more than half of participating executives were optimistic about the New Year.
The survey, which was conducted via email, represents responses from CEOs and/or sales and marketing executives from a cross-section of industries. It revealed a brighter outlook that is a breath of fresh air after 2009 – an economically tumultuous year that forced many businesses to make difficult decisions just to survive.
More than 53% of survey respondents said their companies were forced to slash non-payroll expenses to improve profits, making it the most common remedy to the economic downturn. Others included cutting payroll expenses to improve profits (48.8%) and increasing marketing (27.9%) or sales (14%) budgets to stimulate growth. Just fewer than 5% said they had made targeted acquisitions to stimulate growth.
During the coming year, many expect to resume hiring, with the bulk of activity taking place in the second quarter (53.1%). The majority of respondents (41.9%) said they expect to only hire new employees in select functions or geographic areas while 18.6% expect to hire replacements for department employees. More than 9% said they were planning to hire across the entire business, while 7% intend to fill positions that were placed on hold in 2009.
In terms of where hiring would take place, the Midwest was identified as the region with the most new hires planned (28.1%), followed by national hires (25%). Rounding out geographic plans were the Southeast (21.9%), Northeast (18.8%), Southwest (12.5%) and West (6.3%).
Hiring plans may be a direct result of the expected revenue increases predicted by many respondents. Nearly 35% predicted a revenue increase of up to 20%, while 23.3% expect revenues to climb by more than 20%. Nearly 21% expected revenue s to stay the same, while 14% expected them to decline by up to 10%. Another 7% of respondents predicted revenues would drop by more than 20%.
Those latter results may explain why 16% indicated that they are currently in a hiring freeze and 7% are planning layoffs. When asked when they expect the hiring freeze to end, respondents were split between the 2nd and 3rd quarters of 2010 and 2011 or later (28% respectively).
“It’s tough for us to see hiring anywhere other than sales,” said one respondent. “We would really be looking at leadership roles.”
More than 74% agreed, saying that hiring would focus on sales positions. Other positions targeted for hiring included customer service (32.3%), IT (19.4%), operations (19.4%), leadership (19.4%) and marketing (16.1%). The majority (87.9%) indicated that new hires would be placed in leadership positions rather than individual contributor positions (18.2%).
My personal belief is that we aren’t completely out of the economic rut. However, there are signs that a turn-around may be on the horizon. For example, the 4th quarter was Naviga Recruiting & Executive Search’ best in 2009, and we continue to see positive indicators in our current workload.
And though I’m not yet comfortable with saying that trends are pointing toward a complete recovery, the increased optimism is certain to help boost employee morale. That carries its own positive impact on business.
What are your thoughts on 2010? I would love to hear what you believe the New Year will bring to your company.