Fears for business grow as new survey highlights impact of recession

16 December 2008 – A survey published today by the Chartered Management Institute compounds fears for business in the run up to 2009.  It shows that managers and business leaders across the UK are concerned about rising business costs, low levels of credit, the impact of employee disputes and low skill levels.

The survey of 1,243 individuals shows a 12 per cent increase in the number of senior executives who are nervous about the year ahead.  Asked specifically about business prospects for their organisations, 26 per cent said they are ‘pessimistic’ about 2009, compared to 14 per cent last year.  Those who are ‘uncertain’ about what next year will bring has risen to 22 per cent, up from 20 per cent last year and 10 per cent in 2007.

Unsurprisingly, it is clear from the findings that business confidence is being eroded by the economic climate and the knock-on effect of cash-flow problems.  56 per cent say that rising energy costs will have a negative impact on their business next year, while 42 per cent say that the availability of credit will create problems.  Some also focus on the cost of redundancies with 34 per cent expressing concerns over ‘employment disputes’ and 41 per cent worried about the impact of labour shortages.

Respondents also remain concerned that efforts to kick-start the economy may stall, with 82 per cent suggesting consumer spending will plummet despite the recent drop in interest rates.  75 per cent believe that household debt will increase over the next 12 months and 48 per cent say rising levels of personal debt will hit business in the New Year.

Yet it seems that, despite the pessimism in the marketplace, individuals are motivated to succeed.  18 per cent still intend to change jobs next year and 5 per cent plan to start their own business.  22 per cent also want to build their personal profile and 27 per cent are committed to developing business contacts or networks.

However, it is clear that these individuals recognise the need to ‘get qualified’ as a route to employability, with 35 per cent claiming they intend to take up a qualification or course in the New Year and 22 per cent resolving to ‘build transferable skills’.

Against this backdrop, 4 out of 10 employers suggested that gaps at the ‘higher end’ of the skills spectrum will have a negative impact on their performance in 2009.  The problem is compounded with 60 per cent predicting a decrease in training and development, up from 20 per cent last year.

Jo Causon, director, marketing and corporate affairs at the Chartered Management Institute, says: “No one should be surprised at this level of uncertainty.  However, the drop in the number of organisations developing their senior teams is disappointing, particularly given fears over staff available with the ability to lead their way out of the downturn.  Now, more than ever, is the time to invest wisely because if organisations think that developing competence is expensive, they should also consider the cost of failure and mistakes.”

Respondents were asked to provide a long-term forecast after revealing plans to spend less at Christmas.  The survey found that, although the proportion of employers still hosting parties remains high (67 per cent), many refused to make a financial contribution to ‘office celebrations’ this year.

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Further information:

Mike Petrook, Institute Press Office

Tel: 020 7497 0496; outside office hours: 07931 302 877

Email: press.office@managers.org.uk

Website: www.managers.org.uk

NOTES TO EDITORS

As the champion of management, the Chartered Management Institute shapes and supports the managers of tomorrow, helping them deliver results in a dynamic world. The Institute helps set and raise standards in management, encouraging development to improve performance. Moreover, with in-depth research and regular policy surveys of its 81,000 individual members and 450 corporate members, the Institute has a deep understanding of the key issues.  The Chartered Management Institute came into being on 1 April 2002, as a result of the Institute of Management being granted a Royal Charter.