2009 – A Year of Caution or Growth?
09 January 2009
With 2008 having seen several high profile Companies turn victim of the Credit Crunch, and a substantial amount of employees being made redundant just before Christmas, there are a vast number of predictions that forecast the first quarter of 2009 to see as many as a further 300,000 employees losing their jobs, with up to 600,000 being made redundant by the end of 2009.
The British Chamber of Commerce has requested the Government to not increase the National Minimum wage in 2009 in an attempt to try to ease pressure on organisations.
A Chartered Institute of Development (CIPD) Barometer Report also indicates that for 2009 organisations are unlikely to be offering pay rises, and pay cuts and pay freezes are more than likely in an attempt to stave off any need to make redundancies.
It is likely that we will see further organisations succumb to Credit Crunch and that SMEs are likely to see the current economic environment challenging their very survival. While for others the current economic downturn may offer the chance to extend their market segmentation, looking for opportunities to emerge from the downturn stronger.
In order for organisations to survive the economic downturn it is important to take stock of your business, what is happening to your clients, customers, partners, service providers; suppliers; and the labour pool as any ripple that may affect them can also lead to your organisation being at risk.
Tactical cost reductions will include eliminating discretionary spending, renegotiating purchasing contracts, and reducing exposure to poor payers. Companies may need to review policies on benefit schemes, retirement policies and levels of company contribution to pensions schemes.
For organisations in the fortunate position to have excess cash or access to financing, a downturn offers an opportunity to pick up new assets or capabilities at attractive prices, and those in this position should consider upgrading their human capital, to ensure that they capitilise on the growing shortage of critical talent.
While other companies are laying off staff, this is a unique opportunity to access skills and reshape your workforce to the needs of your current and future business model.
So will 2009 be a year of caution or growth for your company?