Mid-Market Executives Focus on Moving Forward During Uncertain Economic Recovery
Press release from the issuing company
Monday, May 7th, 2012
In the wake of a slower, less predictable economic recovery, mid-market executives are adapting to managing uncertainty, according to Deloitte's "Mid-Market Perspectives: 2012 Report on America's Economic Engine." The annual survey of 528 U.S. executives indicates that 86 percent of respondents believe that continued uncertainty is tempering their expectations for economic growth.
"Because of the significantly slower growth than we've seen in previous recoveries, mid-market executives are increasingly cautious about their expectations for 2012," said Tom McGee, national managing partner, Deloitte Growth Enterprise Services, Deloitte LLP. "Mid-market companies are now trying to meet the challenges of this volatile economy by taking a more adaptable approach to managing certain key business fundamentals."
Moving Forward During Uncertain Times
To prepare for continuing, uneven market conditions, mid-market executives are taking careful actions in three key areas in 2012; talent, finance and technology.
In last year's survey, respondents were overly optimistic about hiring plans. This year, executives are investing in their people and moderating plans to hire new employees:
- The percentage of executives planning to expand their domestic workforce dropped to 42 percent from 48 percent in 2011.
- Despite high unemployment, every executive interviewed acknowledged that it is difficult to find certain categories of skilled talent especially in engineering, healthcare, and IT.
More companies (51 percent) plan to invest in their existing workforce through training compared to last year (34 percent). Additionally, fewer firms plan to increase the number of part-time workers (only 13 percent compared with 18 percent in 2011).
Mid-market companies remain focused on balance sheet health and improving their cash positions while continuing to invest.
- Thirty-five percent of respondents are predicting higher cash balances.
- Ninety percent expect capital investment to grow or at least remain stable.
- Twenty-seven percent are not planning to secure external financing this year, compared to 14 percent last year.
Interestingly, only seven percent of privately held mid-market companies would consider going public in the next year.
Last year's survey showed that mid-market executives understand the importance of technology to their business. This year, respondents re-affirmed that technology continues to be vital to increasing productivity.
- Business process automation remains the top investment pick to increase productivity for 46 percent (down from 52 percent last year).
- Forty percent– up from 29 percent last year – recognize cloud computing and Software as a Service (Saas) as one of the top three technology investments for 2012.