Round-table debate reveals companies have learnt long-term lessons but concern remains over the shape of the future.
A group discussion between senior representatives of UK finance departments has agreed that pre-credit crunch, very few employees (whether junior or senior) treated business budgets with respect. This led to wasteful, excessive attitudes.
One head of financial planning at a large retailer said: ‘No-one was treating our business with the same care as they would their own household expenditure. In fact it was quite the opposite. People didn't think about the small things like stationery usage or the big things like hiring staff. The feeling was "let's throw people and money at problems".’
Another financial controller at a construction firm added: ‘Now we look back after recent rounds of redundancies, we can see that we probably did have too many employees. As a consequence, some of the people that left actually had very small workloads.’
Back to business basics
Attendees at the Martin Ward Anderson Power Hour seminar, a regular platform for debate among senior finance peers, agreed that since the recession started, there's been a long over due refocusing on how departments are structured, what directors are achieving, how spend is allocated and return on investment. It's a refreshing return to business basics.
In the immediate term, cautious accountants holding the purse strings very tightly are now welcomed. ‘These days businesses are being run more as they should be. This plays well to a finance department’s strengths and raises profile within the business,’ remarked one senior attendee. ‘People didn't used to fully appreciate what finance had to say - now they do. The key challenge for finance professionals is to ensure cost control is imprinted within the DNA of the business so the same traps are avoided when the recovery begins. However, it does appear business has finally learnt.’
Encouragingly, there was optimism amongst the Power Hour contributors that an upswing is now more likely - with some positive views from the construction representative: ‘We think that by the summer, if there are no more nasty surprises, we can start to calm down and move forwards. When we bounce it will be all systems go.’
Final redundancies predicted
Employment opportunities for finance and accountancy workers was a large focus of debate, especially since some firms attending had already made at least two rounds of redundancies with a further final one predicted. There was a strong belief that the second half of the year could see UK plc staffed by an army of skilled temporary finance workers as firms wait to be absolutely sure of the road ahead before committing to permanent job offers. Media, consultancy, food fast moving consumer goods, energy, pharmaceutical and some retail firms were flagged as offering the best short-term security.
Martin Ward Anderson chief executive, Richard Wright, said: ‘While certain sectors such as energy and utilities are bucking the trend, there is a structural shift towards temporary recruitment and I anticipate this will continue into the future.’ Interestingly, American owned companies are predicted to start recruiting, thanks to the impact of their early cost cuttings caused by the original mortgage defaults in the USA as far back as 2007.
All senior financial professionals who attended expressed concern on the long-term impact of the extra UK debt that has been taken on to drive the economy through the danger period, with most in agreement that, ‘Even when we return to a period of growth, we are bound to see a significant drag effect for a long time afterwards. It won't be as sharp as the mid 1990s recovery.’
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Leading in a downturn.
May 2009