Thursday, December 17, 2009

Finance Execs Don’t See U.S. Companies Hiring Until 2011

Significant hiring won’t begin at most U.S. companies until well into 2011, even if the U.S. economy continues its modest recovery next year, according to professionals in the finance departments of U.S. companies.

The 2010 Business Outlook Survey released today by the Association for Financial Professionals shows that while more than a quarter of respondents indicate that their organizations will shrink their payrolls in 2010, 46 percent expect that their organizations’ workforces will be stable in the new year.

When hiring begins, most finance professionals expect payroll growth to be modest at first. Of organizations surveyed, 25 percent anticipate returning to pre-recession staffing levels in 2011; 32 percent expect a rebound in 2012; and three out of ten do not expect their organizations ever to return their payrolls to pre-recessionary levels.

This is the sixth year in which AFP has surveyed its members in December to track their outlook of future business conditions.

Financial professionals are uniquely positioned to assess how business conditions will affect their organizations in the immediate and short-term, and they must make critical business decisions – including those concerning borrowing and investment – based upon those assessments. Because financial professionals work in a wide range of industries and in public and private organizations of varying sizes, AFP’s survey results are accurate indicators of future business conditions.

Fifty-one percent do not see economic growth beginning until the second half of 2010 and nearly a quarter do not see it happening until at least 2011.

If the ability to obtain credit does not improve by midyear 2010, then 55 percent of organizations expect to take additional actions to conserve cash, which might include:

• Reducing capital spending (68 percent)
• Freezing or reducing hiring (62 percent)
• Considering closing locations/offices (33 percent)
• Reducing current or planned inventory levels (25 percent)
• Delaying payments to vendors (23 percent)
• Tightening credit standards for trading partners (23 percent)
• Drawing on credit facilities that are still available to build cash (22 percent)

Any of these actions would be on top of the measures that 96 percent of organizations surveyed had taken since the beginning of the financial crisis in September 2008.

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