The Financial Crisis - Stanton Chase International

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FEBRUARY 2009 T h e O n l i n e E x e c u t i v e N e w s f o r C o r p o r a t e L e a d e r s p6 CEO CENSUS Profile and Mobility Trends of the CEOs in the GCC region he profile of the top executives in the UAE and overall GCC region Ttoday seems to be shifting, accommodating the changes caused by the ongoing international economic crisis as well as by the inevitable growing maturity of the market. There is a closer focus on quality, longer-term perspective in business development in the market including entrepreneurial activity, commitment and determination to build on the opportunities offered in the region. More analytically, top executives are still quite optimistic for the overall growth perspectives and seem to believe that these markets, though not immune, will be less affected by the global crisis. The Banking & Financial Services sector is still perceived as the most promising one, followed by Real Estate & Construction and, of course, Oil, Gas & Natural Resources. Professional Services and Technology also rank high, while traditional sectors like the Industrial rank surprisingly low. Although the UAE is an open market with high mobility and constant arrival of more high-level professionals, there is a perceived high shortage of talent. On one hand, this seems to be related to low opportunities in the market to retain top talent, and, on the other hand, to a general profile of the top executives, that seems to emphasize more international experience rather than deep knowledge of a market sector, or use of superior managerial skills. The time period a top executive would plan to stay in the same position averages from 2 to 5 years, however, the length of this period seems to be getting longer rather than shorter. Although “open to suggestions”, most top executives would not be interested in immediate changes in their career and are quite focused on their current position. This is a significant change in a market that until now has been considered so unbalanced that changing positions even within a one-year period was considered a common and acceptable market practice. When considering leaving a current employer or joining a new one, lack of career advancement and, respectively, a role with higher responsibility or more entrepreneurial job description are regarded as the most important factors. Entrepreneurship seems to be gaining ground, as experienced top executives are considering investing more time and money in a market that still seems full of opportunities. Development of personal and professional network seems to be the most important factor for career development. However, emphasis is also placed on international experience, soft skill development and mentoring, indicating that top executives are not opportunists but plan their career more carefully. Besides the personal network, the services of an Executive Search company are also considered important when examining new career opportunities. The markets that seem to attract their interest – besides the UAE – are the other GCC countries and Asia-Pacific, while North America appears to be an interesting second option. However, there is always an eye towards the home country, where most plan to relocate if and when a good opportunity arises. Based on the above results and the shift that seems to be recorded, the necessity of effective career management is again brought to the fore. This includes careful and long-term planning, definition of goals, necessary preparations and action. Market research and the development of skills, experience and other resources are essential for achieving career goals. Though these steps are often disregarded and undervalued when compared to networking, they cannot be substituted when indeed one is dedicated to developing his or her career. Executive Newswire “There is a closer focus on quality, longer-term perspective in business development in the market including entrepreneurial activity, commitment and determination”
By Gail Seuren S T A N T O N C H A S E I N T E R N A T I O N A L It seems you can't open a newspaper these days without reading another article about this or that company going through a "downsizing", a kinder term for layoffs. The truly disturbing news has been about the way some companies are letting go of employees. There is no doubt that turbulent times call for action, and the times we live in are, to say the least, turbulent. Action, however, should at all times be thought through and be consistent with your values. How a company treats the people who are leaving sends a strong message about how it will treat those who are staying. That advice holds true for outside stakeholders as well. Potential customers, vendors or investors (current or potential) reading about unethical or poorly handled lay-offs, would be wary about doing business with that company. How a company responds to turbulence and treats its employees in trying times has a direct impact on its short and long term reputation. The extent to which human resources are recognized and managed as important assets rather than simply as costs, and the role and importance of the human resource function — strategic or administrative — is a direct reflection of its corporate ethics and code of conduct. So how should corporate restructuring ideally take place? An analysis of history shows that in organizations that have successfully restructured, a philosophy of continuous improvement is inherent to the company. “Downsizing” ideally, becomes a continuous process, whether business volume is going up or going down. Streamlining processes to eliminate work avoids overstaffing. The anticipation of imbalances between skill needs and resources as various businesses grow and decline, allows for retraining of employees according to future needs. Peak needs can be met by the use of temporary personnel. In any necessary restructuring, the reduction in personnel should be a last resort. A company should first identify the major risks, calculate all the direct and indirect costs associated with alternative strategies and policies, and evaluate all alternatives which would reduce the need for layoffs. Examples would include retraining and transferring redundant employees to other units in the company, work sharing, laying off temporary employees, freezing or reducing hiring, and changing pay and working hours to eliminate part of the need to downsize. At the same time, opportunities should be explored to increase the volume of work and thus employment. An example is insourcing work that might have been outsourced earlier. In Japanese companies, diversification has often been motivated by the need to provide continuing employment to its employees. Often cross-functional teams are created to develop these plans and to follow implementation. Once all these avenues have been explored and put into practice, and ISSUE 1 Restructuring with Corporate Social Responsibility a company still finds itself in a position where lay-offs are required, acting ethically is of vital importance. To gain the buy-in of managers and survivors and their understanding that the future prospects justify their own collaboration during the downsizing, a clear vision must be defined and communicated. Announcements and communications should be highly orchestrated events which convince all stakeholders that immediate and dramatic change is necessary. Decisions about the message and the business rationale for downsizing, about who should inform whom and when, and about the vision of the business and what employees can expect in the future, must all be carefully managed. Generous benefit packages and allowances and reasonable notification periods can go a long way to demonstrating management’s concern. Prepared announcements are needed as well for the media, local community officials, and other concerned parties. The final phase is the real moment of truth when management demonstrates whether its people really are its most important assets or simply another item of costs. How many times have we heard or read about a sudden morning downsizing announcement inviting those being dismissed to clear out their desks before noon? Contrast this with compulsory social plans in countries like France and Germany which must demonstrate to government labour inspectors that careful attention has been given to finding a satisfactory solution for each employee being dismissed. Some guidelines to responsible implementation include using natural attrition and reduced hiring to the maximum extent possible, seeking all possibilities to transfer redundant employees to other divisions or units of the company, calling upon suppliers and other business partners to hire temporarily or permanently, offering generous early retirement and voluntary separation packages, providing training for reemployment, encouraging and assisting employees to set up their own small enterprises, and organizing internal and/or external outplacement services to help employees find alternative jobs for which they are qualified. Some companies invest considerable effort and money in creating and managing reemployment centers, to help employees analyse their own skills, strengths and weaknesses; identify types of jobs in which they would do well; prepare resumes; and learn how to handle job interviews. Some companies are showing that a more creative approach can make for a much better experience. A good example is management consultancy Accenture and its FlexLeave programme, through which staff can take a sabbatical of up to 12 months on 20 per cent salary. Financial services company Charles Schwab has promised a bonus of $7,500 to any redundant employee it rehires in the next 18 months and has offered bursaries of up to $20,000 to staff who want to study. The outstanding characteristics of responsible companies are that they treat employees affected by downsizing with respect and dignity, that their policies are perceived to be fair to surviving as well as departing employees, that they communicate throughout the implementation process, that there is continuous top management presence and support for the effort, and that the time span for realizing reductions is sufficiently long to minimize layoffs or render them unnecessary. Obviously, increases in salaries and large bonuses for top executives during a painful downsizing operation do not earn the respect of survivors or supervisors directly involved in these efforts. Acting ethically during difficult times is a true test of a company's spirit. If an organization can do the right thing during a lay-off, it will reap the rewards for years to come with all of its stakeholders. p7
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The Financial Crisis - Stanton Chase International

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