AUSTRALIA GROWTH STRATEGIES RECESSION
Australia - Australian employers are cautiously optimistic for 2010 as they are not as badly impacted by the downturn as originally thought, says an Ernst & Young survey.
Seventy-six percent of the 380 executives surveyed in June say they felt the crisis would only have a temporary impact on profits. Patrick Winter, corporate accounts leader of Ernst & Young, says the results show companies have "far more proactive plans over the next 12 months". Compared to the results of a similar global survey, the research also finds that Australian businesses have responded to the crisis aggressively with more cost-cutting and staff reduction in place.
Ninety-two percent of respondents say they were cutting costs, while 71% say they were reviewing cash management and cash flows. More than half of the companies have already cut jobs with another 38% undertaking significant employee reduction programmes.
However, Winter feels organisations are still looking to manage these measures more effectively. "Many have introduced flexible working practices to help them avoid substantial headcount reduction, with a view to retaining the talent they will need when the market recovers."
In addition, Australian businesses are more focused on growth strategies compared to global companies whose primary concern is surviving the downturn, says Business Spectator. To continue growing, 70% of the local companies polled are restructuring, while 66% are searching for new market opportunities.
That said, Winter notes the restructuring plans of the respondents are centred on cost-cutting rather than realigning business structures and operations. "The limited availability of debt has led to a gap in buyer/vendor expectations and a stagnant M&A market. These factors are inhibiting the ability of companies to truly restructure by divesting none core businesses, products or divisions."
He also feels the success from the efforts of Australian employers in sustaining their businesses remains to be seen. "However, the results suggest we may continue to escape the worst of the financial crisis and downturn."
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