1) The survey found that companies are making changes to their recruitment policies in response to the economic downturn, with many freezing or delaying recruitment. There is also a reduced use of consultants and contractors.
2) Respondents saw experience managing through a previous recession as important for senior staff during difficult economic times. This experience was thought to provide knowledge on effective strategies and a calmer leadership approach.
3) When considering opportunities, respondents noted the potential to focus on core priorities, achieve greater efficiency, and increased demand for interim management services during an economic downturn.
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
Bounceback -strategies in an economic downturn
1. Bounceback
Survival Strategies in an Economic Downturn
“Success is how high you bounce when you hit the bottom”
George Patton
Western Europe Survey Report
2.
3. Contents
2 Introduction
3 Method and Survey Sample
4 The Challenges of an Economic Downtown
5 Leadership and Uncertainty
6 Business Impact
7 Impact on Recruitment Policy
8 The Experience Factor
9 Looking Ahead
10 Greatest Challenges
11 Potential for Opportunity
12 Lessons to Remember
1
4. Introduction
Executives Online offers a unique, fast-track approach to Finally, we asked more forward-thinking questions, to learn
executive resourcing and thus maintains strong relationships what respondents saw as the biggest challenges and
with leading companies as well as with executive talent in opportunities – and what lessons they would offer for
the marketplace. managing through a recession.
We undertook a survey of the many key players in the Western We were excited by the positive thinking that we found in
Europe business arena to gain some perspective on the impact the marketplace despite the less-than-favorable economic
that the current trading downturn is having on organisations, conditions, and impressed by the strategic insights and savvy
and to glean insights, lessons, and learnings that can help any tactics offered. We are happy to share these findings with
company to weather - and perhaps even benefit from - the you and hope you find them inspiring as well.
current economic climate.
First we gained a broad assessment of the current marketplace
situation, understanding what activities and attitudes were
shaping response to the crisis. Then we focused specifically on Anne Beitel
recruiting and staffing issues, probing how companies were Managing Director
adjusting their recruiting policies in light of the downturn. Executives Online
Current situation Impact on recruitment Looking ahead
G Challenges in a downturn G Actions underway G Challenge and opportunity
G Leadership and uncertainty G Experience factor G Lessons to remember
G Business impact
2
5. Method and Survey Sample
This report is drawn from an online survey conducted among To provide perspective, we asked about their employment
senior executives and experienced interim managers based in status during the last recession in the early 1990s. At that
Western Europe at the end of 2008. Our survey sample of over time, more than half were employed as executives or
300 included 45% employed executives, one fifth interim managers, a fifth were employed but in a non-executive or
managers on assignment, a small percentage employed in a non-managerial capacity, 5% were working as interim
non-managerial capacity, and one third either interim managers managers or other independent executive professionals,
not currently on assignment or not in the labour market. and 19% were not in the labour market.
Status of Respondent Respondents by Country
2 Austria 1
% 5%
8% Belgium 59
Denmark 3
19%
Finland 3
Status of France 12
22% Current respondent
status 45% during last Germany 20
56%
recession Greece 10
20% Italy 54
Norway 3
23% The Netherlands 73
Portugal 18
Spain 31
Employed in executive/managerial Employed in executive/managerial Sweden 19
capacity –45% capacity –56% Switzerland 9
Interim manager not on assignment –23% Employed in a non-managerial capacity–20% Unspecified 8
Interim manager on assignment –22% Not in the labour market then –19%
Not in the labour market right now –8% Working as an interim manager or other Total Respondents 323
Employed in a non-managerial capacity –2% independent executive professional –5%
3
6. The Challenges of an Economic Downturn
The greatest challenges facing clients or employers
right now were varied yet inextricably linked, and
remaining optimistic and committed was cited as
critical.
When asked what were the greatest challenges facing clients
or employers in the current economic climate, some consistent
themes emerged:
G A downturn in demand, decreased sales
G Cash flow problems
G Reduced access to capital and credit
G Budget cuts and freezes, especially for more
strategic initiatives
G Declining confidence
G Resistance to change
G Lack of skilled people
G Attracting the right talent
Not surprisingly, these elements are inextricably linked – lower
demand leads to fewer sales which leads to slashed budgets
and less access to capital – and thus in this downward spiral,
the ability to attract quality talent becomes compromised as
well. Other "softer" themes emerged which affect this spiral,
such as lack of confidence and the persistent uncertainty that
can cloud even the most straightforward business decisions.
Remaining optimistic and committing to strategic initiatives
with an eye toward the long-term health of the business was
something mentioned repeatedly.
" The greatest challenge in this
economic climate is to prioritise
and reduce activities to enable
the company to meet profit
objectives – but still remain in a
position to maximise opportunities
in the upturn.
"
4
7. Leadership and Uncertainty
Conservative behaviours and fear How has uncertainly affected client leadership?
become more evident in economic
downturns.
160
Uncertainty can affect a company’s leadership in
140
a variety of ways. In this recession, almost half of 45%
survey respondents are seeing those effects to 120
number of responses
include more conservative behaviours. Nearly a
100
third noted more fear, but almost a quarter did
indicate that company management had been 80 27%
making great efforts to reassure the team.
60 22%
40
20
5%
0
Has become Is fearful, and Has made great Has become
more it shows efforts to reassure more
conservative the team risk-taking
Beyond attitude, however, uncertainty has impacted
companies' short, medium, and long-term projects
and additional changes are expected over the next
12 months.
5
8. Business Impact
A "stick to your knitting" attitude and short-term cycles. A priority right now is to establish stability in the
thinking can result as companies focus narrowly short-term, with the hope that growth-oriented initiatives –
on surviving the downturn. including hiring – can be resumed in the medium to long term.
While some respondents noted “no change” in behaviour, for
the majority of companies, there is less appetite for long-term
returns and a renewed focus on:
" New ideas are put on the shelf
when money is involved and only
G The "short term" the most needed expenses are
G
G
Retention of existing clients/business
Core activities
included in the budget.
"
In some cases, new avenues of opportunity are being pursued.
Risk-averse thinking, excessive caution and delay, and slow
There is some increased emphasis on new product development,
decision-making have also been witnessed, particularly around
as companies look for opportunities in “next-generation
making new investments. Companies are adopting a “wait and
see” attitude before committing to any expenses. Initiatives of technologies and growth engines.” Companies are also looking
any sort are examined in great detail and require numerous beyond their borders for new markets, and new brands and
approvals and sign offs before they can move forward. In some lower price points are being rolled out to broaden current
cases, projects are being reduced in scope or broken up into market reach.
smaller, more measurable chunks to make the investment more
palatable and the payoff more attractive. Spending and budget
cuts, and restrictions on travel are also a reality. " We believe that it’s time to create
new opportunities and to invest in
Recruitment has been impacted in the same way; staff has new marketing strategies to keep
been cut in many places and there are hiring freezes or holds
on external recruitment and relocations in some firms. In other
competitive and to keep the
cases, recruitment is just stalled and involves lengthier hiring business on a positive trend.
"
Of key company activities, Recruitment has
If client has taken actions, which areas are
been affected the most by the economic most affected?
downtown.
Among companies who have taken action in response to
R&D
the economic climate, Recruitment has been affected the
8%
most, followed by Operations/Manufacturing. Sales and Training
Marketing have been impacted as well, although many 10% Recruitment
respondents noted the importance of keeping up sales and 28%
marketing initiatives to help maintain company momentum Marketing
especially as the economy begins to recover and new 13%
opportunities emerge.
Sales Operations/
18% Manufacturing
23%
6
9. Impact on Recruitment Policy
What changes has your client or employer made to its recruitment
policy in response to the economic situation?
Frozen recruitment 37%
Delayed recruitment 33%
Reduced use of consultants 31%
Reduced use of interim managers or other contractors 20%
Used less expensive recruitment services 14%
Hired more junior (less expensive) people than planned 13%
Increased use of interim managers or other contractors 9%
Created new roles to deal with the expected difficulty 8%
Used more senior (more capable) people than planned 8%
Increased use of consultants 8%
Used recruitment services with lower/no up-front fees 7%
No change 6%
Companies are cutting back somewhat on permanent Companies are taking a range of actions to address these
recruitment, but some are increasing their use of concerns, with varying degrees of success. In terms of
interim managers and other contract employees as a permanent recruitment, measures include:
means of staffing amidst uncertainty. G Requiring a robust business case be put forward before
pursuing any recruitment
Specifically around recruitment policies, employers are making G More cautious recruitment with longer timeframes and
changes in response to the economic situation, with almost more thoughtful decisions
40% opting for delayed recruitment and one third freezing G Alternate (lower cost) recruitment strategies
recruitment outright. By comparison, contract employers have G Leveraging interim managers or consultants to solve
been affected somewhat less, with a third noting a reduced specific issues
use of consultants and almost a fifth citing reduced use of
interim managers or other contractors. Balancing that out, 9%
There is a growing emphasis on hiring temporary or interim
of employers have increased their use of interim managers or
staff rather than going straight to permanent personnel.
other contractors and 8% have increased their use of
Contract resources, which can be hired on short-term or
consultants. Another change is a shift toward the use of less
medium-term contracts, can ease the recruiting burden
expensive recruitment services.
amidst economic uncertainty. Citing faster results, more
companies are using interim workers which allow them to
Saving on recruitment costs is certainly important at any
address staffing gaps quickly and with less risk than that
time, but it becomes even more pressing during an economic
involved with permanent recruitment.
downturn. Survey respondents raised a variety of concerns
facing them around recruitment, with top themes including
retention of strong performers, identifying strong performers,
and keeping recruiting expenses down. With uncertainty about
the future, businesses are reluctant to commit to the long-
" When shareholders do not expect great
returns, that is when a company can
term fixed costs of permanent recruitment. make investments in people and then
seize market share from competitors
"
7
10. The Experience Factor
Management experience during a previous
Is experience of a recession/downturn an
economic downturn was seen as critical by important criterion for businesses in the
the majority of respondents. recruitment of their senior staff during a
financial downturn?
When asked whether experience of a recession was an
important criterion for businesses in the recruitment of senior
staff during a financial downturn, three-quarters of
respondents said “yes.” While many cautioned against
assuming that lessons from previous recessions would apply
No, it’s not
directly in this one, the majority still conceded that having
very important
worked through similar business conditions in the past would 25%
lend helpful knowledge and experience for the present.
Some of the rationale in this was around experienced
managers being less likely to “panic” or be driven by fear. A
willingness to make the necessary changes to weather an
economic downturn is certainly important, and as “mistakes Yes, it is important
can be costly,” previous experience is helpful. 75%
" A senior executive with recession
experience will have the good ideas
and natural leadership to manage the
Previous experience was seen to bring:
team in this difficult period . . . G “the knowledge of which plans and strategies can work in
because downturns require better a recession”
G
managers, and better experience.
"
The more powerful message was that experienced executives
G
G
“the ability to manage the risks”
“a more mature and less emotional response to the crisis”
“the vision to see beyond the immediate situation”
would realise the importance of strengthening the business
during the downturn, knowing “how to cut in the right areas Perhaps just as importantly in terms of organisational stability,
to protect the future.” A realisation that “things always turn experienced leaders were seen as being able to convey this
around” would help to avoid the “knee-jerk reactions” that confidence amidst crisis to more junior staff members.
would fundamentally damage the long-term health of the Recruitment was an area that many felt should not be ignored
business in the name of short-term expediency. An exclusive during an economic downturn. Taking advantage of the
focus on cost cutting would likely damage the business and increased labour pool, many saw the economic uncertainty as a
leave companies poorly positioned to take advantage of new great time to seek top talent to enrich the company’s workforce.
opportunities that would arise both during the recession, and
certainly at the time of the inevitable economic upturn.
Interestingly, senior executives who had been through a
" Experienced managers will understand
that this is an inevitable part of the
previous recession in a management capacity were more likely
business cycle and will have some idea
to note the importance of longer-term, strategic thinking than
were their more junior, less experienced colleagues. of what to do in order to minimise the
recession's impact on the organisation's
long-term viability.
"
8
11. Looking Ahead
Opinions varied as to when there would be an improvement in
trading conditions, with some feeling hopeful as soon as June
2009 and others believing it would be more like December
2009 or June of 2010.
When do you believe we will start to see an improvement in trading conditions?
32%
25%
24%
8% 8%
2%
By June 2009 By Dec 2009 By June 2010 By Dec 2010 Later than We haven’t seen
Dec 2010 a negative effect
9
12. Greatest Challenges
Of the many challenges facing client or employer businesses,
respondents were split over which might prove the greatest.
Almost 40% cited the need to time investment right in order
to capitalise on the post-recession upturn. Over a third worried
that too many cuts right now would impact readiness for
future growth. Just less than a third felt that remembering
how to think optimistically again would be a challenge.
What will be the greatest challenge to your client’s or employer’s business coming out of recession?
Timing investment right to
39%
capitalise on coming out of recession
If we cut too much now, we
36%
won’t be ready for growth again
Remembering how to
29%
think optimistically again
0 50 100 150
number of responses
10
13. Potential for Opportunity
Almost a third of respondents saw greater need
for their services as interim managers.
Despite the obvious issues and problems that would arise in
an economic downturn, many noted that there could be
opportunities too. Focusing on “what’s really important” and
“achieving a leaner, more cost-effective organisation” were
seen as strong opportunities for just under half of those
surveyed. Almost a third saw greater need for their services
as interim managers.
What opportunities do you see in these types of trading conditions?
Focus on what’s really
49%
important, and cut the rest
Achieve a leaner, more
44%
cost-effective organisation
Companies need my services as an
27%
interim manager more in a downturn
Develop “counter-cyclical”
18%
products and services
Employees are more loyal
15%
in such an environment
Marshall organisation and resources to
15%
position for when there’s growth again
0 50 100 150 200
number of responses
11
14. Lessons to Remember
Learning from the past is perhaps the best way to Keep your focus on what makes a difference
approach the present; while the current downturn G Get back to the basics
may be different from those in the past, the same G Drop anything that is not contributing added value
forward-thinking attitudes and strategic actions
G Don’t delay investment decisions; now is the time to
still apply. develop new initiatives and move ahead of the competition
Survey respondents felt that many lessons could be gleaned
from the last economic recession and applied to this one. Manage costs aggressively, but strategically
The overall tone of response was one of balance, restraint, G Maintain a low cost base
and positive attitude. A variety of lessons emerged across all G If necessary, cut back quickly and deeply so you’ll only
key business areas, including staffing, cost management, need to do it once
marketing, and customer relationships. G Limit cost and staffing cuts to areas that will not impair
future recovery
An intelligent, balanced response is key G Restructure without compromising valuable resources
G Avoid knee-jerk reactions G Cut all non-essential costs and then build gently for the
G Don’t overreact to market conditions upturn
G Be cautious, but don’t panic G Reduce debt and maximise cash for the opportunities that
G Make calm, logical and appropriate decisions based on will come
fact rather than fear G Do not avoid investment just because the outlook is
G Ensure that strategies and resources are in place uncertain
sufficiently to take advantage of the market when it G Plan for the long term
starts moving again
12
15. Make staffing a priority G Provide support in areas where existing clients are
experiencing difficulties
G Listen to staff fears and concerns
G Build stronger customer relationships through adversity
G Be honest with staff and brief them effectively and
regularly to avoid rumours
G Offer staff assurance of their contributions Continue marketing with an eye toward the
G
upturn
Ensure that the best people aren’t unnecessarily lost
G
G Preserve valuable, experienced staff by talking to them Do not cut marketing spend: continuing to communicate
about future opportunities with customers is critical
G
G Use downtime to train staff as that is more difficult Leverage innovative sales and marketing techniques to
during busy times solidify customer relationships
G
G Leverage flexible working contracts and the use of Keep investing in strategically important areas
interim or fixed-term appointments G Maintain your share of voice in the market
G Return to a simpler and cleaner organisation structure G Be bold in approach
G Invest in innovative products and services
Stay close to your customers G Remain positive and identify opportunities wherever
they arise
G Talk to your customers every day
G Focus on maintaining service to clients at constant prices
G Don’t compromise on quality and keep your clients happy
G Understand what new requirements your customers
have now
About Executives Online
We offer a unique, full-service process which is
a balanced blend of technology and personal
service.
Executives Online delivers fast-track headhunting – interim
management, project management, and permanent recruitment
– leveraging our 60,000-strong Talent Bank of senior
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which is built and drawn upon by each of our growing
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