Economic survival will not come easy for European businesses as the global scene has shifted and sped up trends that were already in place. This past year has been a snail’s pace for business growth and warp speed for global business reorganisation. So let’s answer “what’s next?” by exploring what the 2010 growing trends for the European business community will be.
The major employment issue that needs to be addressed by all businesses will be the great scramble as those who survived the redundancies will now be looking to ditch their employer and move on. Consensus seems to be that employees are not satisfied with the way their employers handled the reduction of the workforce and as a result they are going to vote with their feet as the job market improves.
The “war for talent” is not back on as some experts are saying the ceasefire is over and the war is resuming. Rather the CEOs and businesses have lost and the talent (employees) won. Paybacks are going to be tough for businesses as what is not booming on the employment front is employee loyalty. As companies begin hiring again, the first to get new jobs will be the ones who kept them. Companies will revert to the traditional belief that those who are employed are most valuable.
This will have a devastating impact on organisations as they are already operating with a lean workforce and they made their bench redundant. They will be scrambling to triumph over the consequences. Unfortunately, many will respond in the recovery as they did in the recession – by being reactive. A CEO action point is to immediately start investing in your employees, be visible and give them the attention they desire and deserve
The CEO shift
Where will the growth spots be? HSBC seems to think the Far East is the answer as they are relocating CEO Michael Geoghegan to Hong Kong. They are rolling back the clock to HSBC’s original power base from 144 years ago. This is interesting as at that time India and China were the top two global economies and they are predicted to resume this position around 2025. HSBC has recognised that the “new” west is the east.
The business outlook for 2010 is that it will be vogue and profitable to make a major shift. In fact, CEO’s need to make five shifts: market, growth, speed, talent (new workforce), and leader. In the next 10 years, there will be one billion new consumers in the emerging markets, yet 95 of the top 100 MBA programs are western. Do you see the potential crash course?
The world is looking in the direction of where the population is and creating a new ere entitled peoplisation, meaning we no longer live in a world constrained and defined by geographical markings. Rather we live in a world that needs to be understood by where and who the people are. At the world’s current rate of population growth the world is adding a city the size of Paris every 11 days. With massive population growth comes the reality that there needs to be a new definition of growth and the speed of business in the emerging markets will be at a rate that is uncomfortable for many European CEOs.
CEO action point is to lead The CEO shift to the emerging market, and lead it fast.
The “new workforce”
Considering the fact that the future of business is moving to the east, CEOs need to make the talent shift and understand who the “new” workforce is. Five words summarise it: young, eastern, mobile, new, and reset. The workforce in the emerging markets is projected to have 500 million new entrants in the next five years.
The obvious fact is that they are new to organisational life. However, they are exceptionally new as most of the 500 million did not grow up with the influence of the modern global organisation other than consuming the products. For example, most of their parents came from rural or family business (sole proprietor) backgrounds and many are not functionally literate so the grooming for corporate life that happens over the dinner table simply did not take place – this can also be a plus as they do not carry with them historical baggage.
While Europe is wrestling with an aging workforce and all of the entangled employment issues and behaviours, the emerging markets is experiencing a youth bulge. This young generation has a youthful and idealistic mindset about what career mobility should look like. A small little button called the reset button exasperates career mobility concerns and employment behaviour. This is the button that is pressed when the game they are playing on Play Station, Game Boy or Nintendo Wii is not going well. Instead of following through on the game, they have found it more convenient to press the reset button and have a fresh start. This behaviour is showing up in workforce behaviour in the under 35 crowd.
Another descriptor to be attentive to is mobile, both being mobile and the mobile device. Many of the new workforce started their life in the rural hinterlands and joined the great migration to the city as every second – two people make the move. Mobility is a part of life and with mobility comes an intercultural workforce where dozens of nationalities join up and result in many of the issues that the United Nations struggles to comprehend. Additionally the mobile device is an integral part of life and is shaping their behaviour and expectations from their employer. For example in China, they apply for jobs on their mobile phone.
And of course the new workforce is eastern, where 72 percent of the world’s population currently resides. CEO action point is to reshape your thoughts about employees and see that the European workforce is heading for retirement and that there is a new outlook.
To summarise the trends and today’s future, it comes down to two point: the future for European business needs to include emerging market expansion and that employee relations is a critical risk factor for 2010. Companies invest millions in consumer insights and customer profiling, equal attention needs to be given to employee insights if CEOs want to recover quickly. Leaders need to shift their focus to the future which is today.