People Power: Business across the globe to employ more staff to accelerate growth
 

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The Regus Business Tracker - Edition 3 - reveals that companies all over the world are planning to increase headcounts as a way of accelerating growth. Find out more about Regus: ...

The Regus Business Tracker - Edition 3 - reveals that companies all over the world are planning to increase headcounts as a way of accelerating growth. Find out more about Regus: http://www.regus.com?utm_campaign=slideshare

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People Power: Business across the globe to employ more staff to accelerate growth Document Transcript

  • 1. People Power Business across the globe to employ more staff to accelerate growth The Regus Business Tracker – Edition 3 October 2010
  • 2. 2 Management Summary  The Regus Business Optimism Index has risen by four points over the last six months, indicating positive news for the global economy. The index combines current company performance with future outlook indicators  In a further positive indicator, respondents to the six-monthly Business Tracker survey are looking to increase headcount, and attract new staff to accelerate growth  45% of companies globally expect to add staff to their payroll in 2011, compared with 9% expecting to cut staffing levels, resulting in a net positive employment result of 36% for 2011.  Companies reporting revenue growth in the last year are net positive (+19%), and indeed firms reporting growing profits are also in a net positive position (+10%).  This hard evidence of positive economic trends gives credence to high expectations of revenue growth in the coming year (+69%).  However, a net 41% of companies are still looking to reduce their overheads, through other means than reducing staff – probably by more efficient infrastructures and business process management techniques.  While firms are still aiming to achieve further economies in their businesses, this is to be achieved in areas other than human resources, such as business process automation, flexible workspace solutions, outsourcing or pay-as-you-use services  As companies ready themselves to grasp the opportunities offered by recovering marketplaces firms will be looking to increase headcount. However, in order to meet their overhead reduction targets, firms are also likely to pursue flexible working practices, from flexi-time to tele-working and offering equipped locations closer to home, in order to attract new talent and retain existing staff. 1100 locations 500 cities 85 countries regus.com
  • 3. 3 Geographical highlights  Asia’s emerging giants continue to celebrate their growth. Around six out of ten companies in India and China have experienced rising revenues in the past 12 months.  Chinese companies show a slightly greater ability than Indian companies to translate higher revenues into higher profitability: 65.3% of Indian companies have seen revenues rise; 55.6% have seen profits rise; in China 60.5% saw revenues rise, and 54.5% saw profits rise.  China and India’s performance contrasts with Asia’s longer-established giant: Japan. There, around one-third of companies saw profits rise.  Employment prospects, in the shape of the proportion of companies intending to employ more staff, are universally positive, at 62% in China, 44% in Japan and 38% in India  The USA remains among the more pessimistic countries. Companies reporting a rise in revenues or profits were below average. Nevertheless, the USA reported above an above- average number of companies whose revenues and profits have remained flat indicating that although improvement has been hard to come by conditions may have at least stabilised. In spite of measures targeted to improving the labour market, USA firm’s expectations to hire new staff remain slightly below the global average at 39% compared to 45%.  Confidence levels in Western Europe are relatively low - in France, Belgium and Spain especially. However, Germany and the Netherlands are in sunnier mood, with more than seven out of ten companies expecting to increase their revenues in the next 12 months.  Spain has the lowest optimism level of any of the major countries: almost half the companies surveyed think that their revenues will fall or stay flat. This reflects their underperformance in the past 12 months, with fewer than three in ten companies reporting a rise in revenues.  All Western European countries except Spain have seen a rise in the Business Optimism Index score, accompanied by a net positive proportion of companies intending to employ more people in the coming months. And even in Spain, the employment indicator remains positive, presumably indicating the recognition of a need for excellent staff to generate business growth. 1100 locations 500 cities 85 countries regus.com
  • 4. 4 Introduction The global economy has continued its recovery in 2010, to the extent that, halfway through the year, the International Monetary Fund (IMF) raised its 2010 growth projections for world output from 4.2% to 4.6%. In its World Economic Outlook, it pointed to an array of positive indicators, including growth in private demand, consumer confidence, industrial production and trade, as well as employment. On this basis, it projects that world output will rise by 4.3% in 2011. 1 In the USA measures to stabilize financial markets, guarantees and stress testing led to average 4% GDP growth (seasonally adjusted annual rate) in the second half of 2009 which, however, slowed to 2.7% in the first quarter of 2010. Recovery has indeed been slow by historical standards and is still dependent on policy support. 2 Unemployment remains high at 9.6% although private sector payroll continues to increase slightly, a trend which supports our findings indicating that there is reason for optimism on the employment front as 39% of USA companies intend to increase head count in the coming year. 3 Driving much of the 2010 recovery was robust growth in Asia. The IMF expects real GDP in Asia to grow by 7.5% in 2010, compared with 3.6% in 2009. In 2011, it predicts real GDP growth of 6.75% in Asia, boosted by buoyant exports and domestic demand. China and India, respectively, are expected to produce real GDP growth of 10.5% and 9.4% in 2010, and 9.6% and 8.4% in 2011. But the IMF also pinpoints causes for concern. In contrast to the brightening skies in the emerging and developing economies of Asia and elsewhere, the skies in Europe remain overcast. The recovery in France, Germany, Belgium & Luxembourg, and the Netherlands remains fragile: none is expected to grow by more than 1.6% in 2011. The UK forecast is only slightly more positive, at 2.1%. The projection for GDP growth in Spain in 2011 is just +0.6%, although this is an improvement on the projection for 2010: -0.4%. The IMF highlights other sources of worry, too, saying that the financial turbulence of 2010 has increased the downside risks. Governments – especially European governments - need to 1 http://www.imf.org/external/pubs/ft/weo/2010/update/02/index.htm 2 http://www.imf.org/external/np/sec/pn/2010/pn10101.htm 3 http://www.bls.gov/cps/ 1100 locations 500 cities 85 countries regus.com
  • 5. 5 rebuild confidence and stability, and tackle financial sector and structural reforms. Worries about sovereign debt persist and could lead to financial stress and contagion. Critically important is the issue of employment, frequently cited by economists as an indicator of sustainable economic growth. The IMF has recently reported that world unemployment has increased 30 million to 210 million since 2007 4 . Unemployment has a major impact on any economy, increasing state spending and reducing taxation income. Therefore the positive news on employment coming out of the latest Regus Business Tracker survey is of tremendous economic significance. Thus, there are multiple downside risks, but even taking these into account, the IMF paints a largely positive picture. The clear geographical differences identified by the IMF and other economic forecasters will help businesses map out their future strategies, informing their decisions about where and how they need to allocate their resources in future, and where and how they might see revenue and profits growth. The Regus Business Tracker study When deciding on their objectives and targets for the coming years, businesses need clear information on economic and business trends in key markets around the world. They want data that affords clear comparisons between different markets; they want to know about the trends and conditions being experienced by businesses like them; and they want to know about those businesses’ views about future trends. The Regus Business Tracker Survey - of which this is the third edition - gives businesses exactly that information. The survey is based on over 10,000 responses from businesses around the world, in both advanced and key developing economies where Regus operates. The pool of respondents is broadly representative of industries in each region. Companies 78 countries were asked about their revenues and profits over the past year, and about their revenue expectations for the next 12 months. Their responses provide an excellent measure of the conditions and prospects facing businesses across the globe. Such a measure provides a powerful tool for companies as they draw up their own predictions and plans for the next 12 months and beyond. 4 nd IMF, Sharp rise in unemployment since 2007, 2 September 2010 1100 locations 500 cities 85 countries regus.com
  • 6. 6 The Regus Business Optimism Index Every edition of Business Tracker presents an updated view of the Regus Business Optimism Index. This index is a measurement formed on an aggregate of positive forward-looking statements worked out on a model combining year-to-date revenue and profit trends with views on the expected economic upturn in the coming six months. The goal of the Optimism index is that of providing a single point of reference of the survey’s key findings, with a benchmark average that was set at 100 in the first publicly published edition of the Regus Business tracker in October 2009. October 2009 April 2010 October 2010 Global Average 100 94 98 Spain 74 68 59 Japan N/A 77 84 USA 94 80 87 France 85 85 93 Germany 100 89 95 Netherlands 94 90 95 Mexico 93 97 96 Belgium 91 89 99 Canada 112 108 99 UK 79 81 100 Australia 109 132 107 South Africa 127 105 108 India 138 167 119 China 105 108 127 Key Growth Decline The latest edition of the Regus Business Optimism Index paints a far rosier picture compared to the April 2010 edition. Globally optimism is climbing up to the levels recorded in October 2009 with a far greater proportion of countries revealing that they are optimistic about their outlook than six months ago. Overall Western Europe has become more optimistic with France, Germany, the UK, Belgium and the Netherlands all recording an increase in optimism levels. Spain represents an exception as optimism continues to plummet exacerbated by record unemployment and a general government deficit of 11.2% of GDP in 2009. 5 5 http://www.imf.org/external/np/sec/pn/2010/pn10106.htm 1100 locations 500 cities 85 countries regus.com
  • 7. 7 While the USA can boast an increase in optimism levels, Canada has recorded a steady decrease since October 2009. In Asia, Chinese bullishness is on the rise while Indian prospects are somewhat muted and Japan records a substantial increase in optimism. Perhaps as a result of influx of capital after the World Cup 2010, South Africa records higher levels of optimism than those found in April while Australia is noticeably less bullish. Finally, Mexico records a very slight inflection in optimism probably due to the unsettled security situation currently disturbing the country. Recovery will boost employment levels Almost half (45%) the businesses surveyed plan to add staff to their payroll in 2011, compared with just 9% expecting to cut staff levels. This creates a net positive employment trend of 36% for 2011. Since economists frequently cite rising employment levels as a strong indicator of sustainable economic health, the findings of this latest Regus Business Tracker survey would seem to offer strong evidence for global recovery and growth, fuelling taxation income and reducing levels of state support. Only in France, where unemployment stands at similar levels to the US at 9.6%, 6 are a sizeable number of businesses – 23.7% - expecting to cut staff in 2011, and despite this greater turbulence in the French employment market, the country still registers a net positive proportion of companies intending to increase employment numbers. Employment increases in Western Europe are strongest in Germany, which has also experienced an export boom recently, and where pension schemes for instance were protected from the worst effects of the financial markets crisis because of their non-reliance on equity investments. China (62%), Japan (44%) and Australia (55%) report a very healthy outlook on the proportion of companies intending to increase staffing levels, Interestingly, Canada (41%) makes a stronger showing than the USA (32%), perhaps indicating the long-tail effect of the sub-prime crisis in the United States. Finally, even in Spain, which has seen a severe drop in its Business Optimism Index score, employment prospects remain positive, presumably indicating that actual economic growth cannot be achieved without access to essential human resources. 6 http://www.bls.gov/ilc/intl_unemployment_rates_monthly.htm 1100 locations 500 cities 85 countries regus.com
  • 8. 8 At the same time, a net 41% of companies are looking to reduce their overheads – though not, it seems, by cutting staff. It seems, therefore, that they will be looking to use other techniques, such as more efficient infrastructure and business process management techniques, to cut overheads and raise profitability. Net Staff Addition China Australia Japan Mexico Canada DE India Global Average SA UK USA ND Spain Belgium FR 0% 10% 20% 30% 40% 50% 60% 70% The desire to cut overheads is particularly strong in continental Europe, with 60.6% of French, 56% of Belgian, 56.5% of Dutch, and 63.5% of Spanish companies saying they intend to do so in 2011. Given that, globally, companies intend to increase headcount, demand for top talent will become more pressing and firms will have to seriously devote time to planning strategies apt to attracting top staff and retaining their best employees who having endured the hardships imposed by the downturn, from frozen salaries to overwork may be tempted by the appealing offers of competitors. 1100 locations 500 cities 85 countries regus.com
  • 9. 9 In addition to this planned increases in headcount overhead reduction was a much cited objective for most companies, an indicator that although companies want to remain lean they also realize that they need the skills of their staff to fully grasp the opportunities offered by recovering marketplaces. Therefore the recruitment challenge and the overhead reduction target are likely to result in an increased take up of flexible working practices ranging from the employment of more part-time or freelance workers, to offering existing and new staff the option to work remotely whether closer to home or at home and to select tailored flexible working hour options that reconcile professional needs with personal life. The Business Tracker: An international overview To delve into a little more details, the October 2010 edition of the Regus Business Tracker incorporates a macroeconomic section which gauges businesses’ views of their performance during the previous 12 months and their expected performance over the next 12 months. This follows the pattern of the two previous Business Tracker surveys. Like the previous ones, the October 2010 survey also asks for businesses’ assessment of the pace at which they expect to economic recovery to advance in their country. When exploring businesses’ experiences of the previous 12 months, the survey considers both revenues and profits. This is important, since they illustrate two different aspects of national performance: profit indicates the productivity of a business, whilst revenue trends indicate the size of infrastructure that a company can maintain. The October 2010 survey shows that businesses’ experiences have improved in the last six months. While in April 2010 42% of companies had seen a rise in revenues in the past 12 months that number is now up to 44%. In this edition of the Regus business tracker fewer businesses (25%) had seen revenues fall compared to 30% in April 2010. In addition to this, the number of firms reporting profit growth is net positive at 10%: with 38% seeing profits rise and 28% seeing them fall. But behind the net rise, there is a modest slowing in the rate of economic recovery compared to the responses given six months ago. Companies globally have in fact pushed back their expectations for the full momentum of economic recovery from December 2010 to April 2011. While slippage of the expected tipping point at which the full swing of recovery will take place is found in most countries. Germany, where 74% of companies recorded a revenue rise in the 1100 locations 500 cities 85 countries regus.com
  • 10. 10 past 12 months, remains the bullish exception, leaving unaltered its expectations for full recovery in January 2011. France and Japan have pushed back their expectations more than other geographies studied postponing them by a full 7 months. They are shortly followed by Mexico and the USA which has pushed back the full momentum of recovery by 6 months. China, India, Australia and Belgium have suffered only a 4 months slippage while the UK, Canada and South Africa expect the full swing of recovery not to take place for almost another semester. Despite this modest slippage other indicators are painting an ever more positive picture. In October 2009, 65% of companies globally were optimistic that they would increase revenues over the next 12 months, compared with the 44% who report that they have achieved this in practice in the October 2010 survey. Despite the slower pace of recovery, there is no sense that disillusionment has crept in: 69% of companies expect their revenues to rise over the next 12 months; this despite the fact that 38% do not expect recovery in their country to advance until the second half of 2011. Globally, and in most major economies, the number of companies reporting increased revenues and profits outstrips the number reporting flat revenues and profits; this in turn outstrips the number of companies reporting declining revenues and profits. Only in Spain do companies with declining revenues and profits (41.3%) outnumber those who report a rise (29.7%). Whereas in most countries the proportion of companies reporting a rise in revenues or profits is broadly the same, there are exceptions here too. In Mexico, 42% of companies have seen revenues rise, and 27.7% have seen revenues stagnate. But just 25.5% have seen profits rise, and 49.6% have seen them remain flat. There is clearly scope for improvements in productivity by Mexican companies. As for the ‘winners’ in terms of the countries with the rosiest experience of rising revenues and profits, India and China lead the way. Australia, South Africa and the UK also exceed the global average, with South Africa’s economy perhaps boosted by the FIFA World Cup. The country with the saddest tale to tell is Spain, which is still beset by unemployment rates of almost 20% 7 7 http://www.imf.org/external/np/sec/pn/2010/pn10106.htm 1100 locations 500 cities 85 countries regus.com
  • 11. 11 and the aftermath of the real-estate bust: over four out of ten companies there have seen revenues and profits decline. India China Australia SA UK Global Average Canada Mexico USA Belgium ND DE Japan FR Spain 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Revenues risen in the past 12 months Profits risen in the past 12 months An optimism spanning continents and sectors With both economic indicators and many companies’ own experience showing that recovery is underway, there are high expectations of revenue growth in the coming year: 69% expect to increase company revenues in the next 12 months. Only 8% expect them to decline. This optimism spans businesses of all sizes and in most sectors. Even in retail, the sector least confident about the 12 months ahead of them, more than half (54%) of respondents expect revenues to rise in the next 12 months. Companies in India and China remain bullish about their future prospects, with 87.5% and 78.8%, respectively, expectant of rising revenues in 2010-11. And still in the afterglow of the World Cup, 81.5% of South African companies expect a rise in revenues over the next 12 months. 1100 locations 500 cities 85 countries regus.com
  • 12. 12 Those apparently expecting the greatest transformation in their fortunes are to be found in Germany and the Netherlands. In the former the number of companies expecting revenues to rise in the future is about 36 percentage points higher than the number who have seen them rise in the previous 12 months; in the Netherlands, it is 33 percentage points higher. Percentage of companies expecting revenues to rise in the next 12 months India 87.5% South Africa 81.5% China 78.8% Germany 74.1% Canada 72.8% Netherlands 72.6% Australia 70.1% Global average 69.0% UK 65.8% Mexico 65.7% USA 64.5% France 60.8% Japan 59.6% Belgium 58.0% Spain 51.6% Asked to look at the wider picture of the momentum of economic recovery in their own country, companies have mixed views. Only one in five (19%) think recovery is already advanced in their own country. Double that number (38%) do not expect economic recovery to advance strongly until the second half of 2011. In some cases, there is a marked disjuncture between companies’ own experience of revenue growth and their views about when economic recovery will be felt. In both the US and the UK, for example, over 40% of companies report rising revenues, but less than 7% think that economic recovery is already advanced in their country. Even in China, where the IMF predicts double-digit GDP in 2010 8 and where six out of ten companies have seen revenues rise in the previous 12 months, 60% of respondents think the recovery will not gain momentum until 2011. 8 http://www.imf.org/external/pubs/ft/weo/2010/update/02/index.htm 1100 locations 500 cities 85 countries regus.com
  • 13. 13 Does size affect confidence Each edition of the Regus Business Tracker Survey looks at how company size influences companies’ experience and expectations. The current survey indicates that larger companies (250+ employees) have navigated the choppy seas of recovery better than small and medium sized companies, being more likely to report rising revenues and profits than their smaller counterparts. 250+ Employees 50-249 Employees Profits risen in the past 12 months Revenues risen in the past 12 months Global Average 0-49 Employees 0% 10% 20% 30% 40% 50% 60% 70% 80% But a company’s size appears to have less effect on its future expectations. Levels of optimism that revenues will rise in the next 12 months are consistent across companies of all sizes: at 68% for both small and medium-sized companies and at 71% for larger companies. There is also broad agreement about how advanced the economic recovery is in companies’ own countries. The optimism and ambition that fire the entrepreneurial spirit is evident in the future strategies planned by smaller companies. Businesses with 0-49 employees are more likely than companies with 250+ employees to add staff in the coming year. 1100 locations 500 cities 85 countries regus.com
  • 14. 14 Conversely, almost six out of ten (58%) companies with 250+ employees intend to cut overheads, compared with 41% of small companies, and 51% of medium-sized companies. Larger companies are also more likely to cut staff than their small and medium-sized counterparts, with 22% intending to cut staff, compared with 6% and 12% respectively. The experience of different sectors The Regus Business Tracker Survey compares the experiences and perceptions of companies in different sectors. It seems that almost half the banking, insurance and finance companies surveyed have put the financial crisis behind them, with 48% seeing a rise in revenues during the previous 12 months. The retail sector continues to feel the effects of consumers deciding to repay debt or save rather than spend: only 29% have seen revenues rise. The sector most confident of benefiting from economic recovery is media & marketing, with seven out of ten (69%) companies expecting revenues to rise over the next 12 months. Even in the least optimistic sector – retail – more than half the respondents (54%) expect to see an increase in revenues. In terms of firms’ future outlook, there is a broad correlation in their plans, with few stand-out figures. The sector least likely to see employment levels rising is manufacturing and production: here only 35% of firms expect to add staff, whereas in all other sectors over 40% of firms expect to do so. 1100 locations 500 cities 85 countries regus.com
  • 15. 15 Country highlights United Kingdom  UK companies’ experience of rising or falling revenues and profits over the past 12 months is fairly similar to the global average.  But they are less convinced than companies overseas about the rate of economy recovery: over half of UK companies do not expect economic recovery to advance until the second half of 2011. Only 6.6% think it is already underway.  The pressure to cut costs among UK larger companies seems especially strong: 66.9% of companies with 250+ employees will reduce overheads in 2011, significantly higher than the global average of 45%. Over one-fifth of large companies intend to cut staff, more than twice the global average of 9%.  53.2% of ICT companies in the UK intend to add staff in 2011, a reflection of the fact that, in a sector where many staff work on short-term contracts, firms can add or reduce staff numbers relatively easily. USA  Despite the fiscal stimulus given to the US economy in 2009-10, there is not overriding evidence of a feel-good factor. US firms are slightly less likely than the global average to have seen revenues rise (40.9% compared with 44%).  60% of US companies do not expect economic recovery in their country until the second half of 2011, whereas globally only 38% of companies think this.  Retail has been especially hard hit in the US: twice as many companies have seen profits stay flat (48.8%) as have seen them rise (24.4%) in the previous 12 months. France  French companies have been hit hard by the fragility of the global economy. More than six out of ten companies (63.8%) have seen revenues stay flat or fall during the past 12 months. 69.8% have seen profits stay flat or fall.  The French are less optimistic than the global average: 60.8% expect their revenues to rise, as opposed to 69% of companies globally. 1100 locations 500 cities 85 countries regus.com
  • 16. 16  There seems to be a feeling among French companies that they are burdened with dead weight. Almost a quarter (23.7%) want to cut staff (the global average is 9%) and 60.6% want to cut overheads. Germany  German companies have emerged from recession in good spirits. Almost three-quarters (74.1%) think they will see increased revenues in the next 12 months.  Germany’s mighty manufacturing and production sector is especially optimistic: 90.5% of companies expect their revenues to rise in the next 12 months.  37.2% of German businesses think economic recovery in their country is already underway, whereas only 19% of companies globally think this.  German companies demonstrate the greatest ability to translate revenue growth over the last 12 months into profits growth, with the number reporting profits growth (37.2%) just less than 1 percentage point lower than the number reporting revenue growth (38.1%). Netherlands  Unlike their neighbours in Germany, Dutch companies are not convinced that economic recovery has begun – even though almost four out of ten (39.3%) have increased their revenues in the past 12 months, only 14.1% think that recovery is underway.  33.3% of Dutch companies think economic recovery in the Netherlands will advance in the first half of 2011; 38.5% think it will not advance until the second half of 2011.  In contrast to the global figures, larger Dutch companies have underperformed smaller ones: just 30.8% of companies with 250+ employees report revenue rises, compared with 40.5% of companies with 0-49 staff. Only 23.2% of larger Dutch companies achieved rising profits, compared with 36.9% of smaller ones. Belgium  Belgian companies are slightly less likely than the global average to have seen profits (36%, compared with 38%) and revenues (40%, compared with 44%) rise. But large Belgian companies have fared well: 60% report rising profits in the past 12 months, and 57% report rising revenues.  Belgian companies are among the least optimistic companies in the world about the next 12 months: only 58% expect revenue to rise, compared with 69% globally. 1100 locations 500 cities 85 countries regus.com
  • 17. 17  In a country already suffering high structural unemployment, 9 only one-third (33%) of Belgian companies expect to add staff in 2011, less than the global average and the lowest percentage among the major economies surveyed. Spain  Spanish companies paint a gloomy picture of the past 12 months. They are the least likely of any of the major economies surveyed to report good news: just 29.7% have seen revenues rise, and just 25.8% have seen profits rise.  Only around half of Spanish companies (51.6%) expect revenues to rise over the next 12 months.  Companies’ future outlook on staffing are unlikely to help Spain’s high unemployment figures: 41.2% of Spanish companies with 250+ employees plan to cut staff; only 11.8% of these companies plan to add them. Overall, four out of ten (39.4%) plan to add staff next year, lower than the global average. India  Indian companies are more likely than those in any other major economy to report revenue and profit rises. 65.3% saw revenues rise, and 55.6% saw profits rise.  Indian companies are also the most confident about the next 12 months: 87.5% expect revenues to rise.  Such experiences and optimism lead 62.5% of Indian companies to think that economic recovery is advanced in their country. China  Six out of ten (60%) companies in China report rising revenues in the past 12 months, and 54.5% have seen profits rise. Larger companies have fared better than small companies, though: 80% of larger companies have seen revenues rise, compared with 49.5% of those with 0-49 employees.  Eight out of ten (78.8%) companies in China expect revenues to rise in the next 12 months.  Two-thirds of companies (66.5%) plan to add staff in 2011. 9 http://www.oecd.org/document/46/0,3343,en_33873108_33873261_45268718_1_1_1_1,00.html 1100 locations 500 cities 85 countries regus.com
  • 18. 18  Unlike in other major economies, there seems little pressure for companies in China to cut costs: only 17.1% of companies will reduce overheads in 2011, compared with the global average of 45%. Japan  Fewer than four out of ten (37.3%) Japanese companies have seen revenues rise in the past 12 months. Larger companies in Japan performed better than their smaller counterparts, though: more than half (52.1%) of companies with 250+ employees have seen revenues rise in the past 12 months; 47.9% have seen profits rise.  Levels of optimism about the next 12 months are lower than the global average: 59.6% of companies expect revenues to rise, compared with 69% globally.  Instead, more companies seem to look further to the more distant future: whereas only 5.0% of Japanese companies think recovery is already underway in their country, 58.2% expect it to advance in the second half of 2011. South Africa  South African companies expect the benefits of the World Cup to continue over the next 12 months: 81.5% expect their revenues to rise over the next 12 months, compared with the global average of 69%.  Larger companies fared better than their smaller counterparts with 72% of companies with 250+ staff reporting a rise in revenues compared to 41.5% of small companies.  250+ employee companies were also more likely to see a rise in profits compared to smaller companies with 77.8% of the former recording a rise compared to 38.1% of the latter. Canada  Canada’s experience of the last 12 months broadly matches the global average: 43.7% of companies saw revenues rise, and 37.1% saw profits rise.  Large companies’ experience is significantly better than the global average: 92.9% of companies with 250+ employees saw revenues and profits rise.  Canadian companies are more optimistic than their US neighbours about the next 12 months: 72.8% of companies expect revenues to rise over the next 12 months, compared with 64.5% of US companies. 1100 locations 500 cities 85 countries regus.com
  • 19. 19 Mexico  At the other end of the US, over four out of ten (42%) of Mexican companies saw revenues rise. However, companies struggle to convert this into increased profitability: a much lower 25.5% saw profits rise.  This perhaps influences the fact that over half of companies in Mexico (50.4%) want to cut overheads in 2011. Australia  Australia’s economy largely escaped the ravages of global recession, and this is evident in the number of companies reporting increased revenues over the past 12 months: 50.6%.  Only a fifth (20.1%) of companies saw revenues fall.  The fact that Australia was relatively unscathed by recession is played out in companies’ headcount plans for 2011: only 2.4% of companies plan to cut staff, whilst 56.9% plan to add staff. 1100 locations 500 cities 85 countries regus.com
  • 20. 20 Conclusion The results of the October 2010 Regus Business Tracker suggest that companies all over the world have emerged unbowed from global recession. Almost seven out of ten (69%) companies expect to see revenue growth in the next 12 months; this optimism can be seen across different continents and sectors and in companies of different sizes. This optimism is all the more remarkable given the fact that a much smaller number believe that economic recovery will gain momentum in their country this year. Just 34% believe it is already underway or will happen before 2010 is out. The difference between the two figures has two possible causes. First, companies believe strongly in their own ability to increase revenues, even in economic conditions that are not ideal. Second, companies are using exports and overseas operations to fuel their growth. The survey shows the extent to which companies’ optimism is accompanied by hard-edged practical strategies. Companies have high hopes for the next 12 months, but they also know they face tough decisions. 45% plan to reduce overheads, rising to 60.6% of companies with 250+ employees. But far from cutting costs by slashing headcount, a sizeable proportion of companies worldwide – 45% - plan to take on new staff. This is a positive indicator that companies increasingly want to invest in human capital, even while they are seeking economies in their operations. This points to the fact they are seeking greater efficiency elsewhere – perhaps in their business process management techniques and perhaps in their approach to infrastructure. It also points to an intention to make increasing use of flexible workers such as freelancers and part-time workers as well as of flexible working practices. To increase and retain their valuable human capital companies will have to elaborate strategies that improve working practices, for example favoring work-life balance or reducing stress while reducing their overheads significantly. For workers there are positive indications that globally the job market is improving and that more and more companies will be offering appealing perks such as the ability to work closer to home, remotely or with flexible working hours. 1100 locations 500 cities 85 countries regus.com
  • 21. 21 Methodology Over 10,000 business respondents from the Regus global contacts database were interviewed during August and September 2010. The Regus global contacts database of over 1 million business-people worldwide is highly representative of senior managers and owners in businesses across the globe. Respondents were asked about their recent revenue and profit trends, along with their future views on a number of issues including the timing of substantial economic recovery in their country. The survey was managed and administered by the independent organisation, MarketingUK. 1100 locations 500 cities 85 countries regus.com
  • 22. 22 About Regus Regus is the world’s largest provider of workplace solutions, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and the world’s largest network of video communication studios. Regus enables people to work their way, whether it’s from home, on the road or from an office. Customers such as Google, GlaxoSmithKline, and Nokia join hundreds of thousands of growing small and medium businesses that benefit from outsourcing their office and workplace needs to Regus, allowing them to focus on their core activities. Over 800,000 customers a day benefit from Regus facilities spread across a global footprint of 1,100 locations in 500 cities and 85 countries, which allow individuals and companies to work wherever, however and whenever they want to. Regus was founded in Brussels, Belgium in 1989, is headquartered in Luxembourg and listed on the London Stock Exchange. For more information please visit www.regus.com Disclaimer Whilst every effort has been taken to verify the accuracy of this information neither Regus plc nor any of its subsidiary business can accept any responsibility or liability for reliance by any person or organisation on this white paper or any of the information, opinions or conclusions set out here within. 1100 locations 500 cities 85 countries regus.com