Category: Management & Leadership

Advanced economies – including that of the United States – are projected to continue experiencing particularly low growth, with an overall expansion of only 1.3 percent expected for 2012. U.S. growth was projected to be 2.2 percent.

Olivier Blanchard, chief economist at the IMF, linked low growth and uncertainty in advanced economies to slowdowns in developing nations, for which growth prospects were also reduced.

What this means for U.S. businesses

The IMF’s assessment primarily acts to confirm what most professionals had already pieced together – the global economy is still struggling, meaning current gains are fragile and reversible.

Analysts asserted that either a flare-up of the eurozone crisis or a failure by U.S. lawmakers to address the looming “fiscal cliff” – a combination of pending tax increases and spending cuts – would cause the organization to further reduce its growth forecast.

The implication for U.S. businesses is that careful financial planning in the present will be crucial in order to enable companies to experience success going forward. Such planning depends on a mix of shrewdness and fiscal expertise at the highest levels of corporate leadership.

That’s why it is so important to ensure that candidates for CFO jobs and other critical positions are appropriately vetted before being hired. In addition to the direct costs of making a bad hiring decision at the C-level, there is also the disruption to the company’s long-term strategic planning.

Recruitment firms can help businesses ensure that they are reaching high-caliber candidates in every financial professional search.

The Department of Labor’s Bureau of Labor Statistics (BLS) released its employment situation update for the month of September on Friday, October 5.

According to the report, there was a net gain of 114,000 nonfarm payroll jobs in September – almost 50,000 fewer than the figure that was projected by last week’s employment report from ADP. As we discussed previously, there are a number of factors that cause divergence between the two reports.

BLS also reported that the national unemployment rate dropped to 7.8 percent in September, down from 8.1 percent in August. This part of the report has already proven to be controversial, with some commentators asserting that the data may have been manipulated by the Labor Department in order to bolster the administration’s claims that the economic recovery is picking up.

Other analysts, such as the New York Times’ Paul Krugman, assert that the falling unemployment rate reflects genuine improvement in the U.S. employment picture, pointing to ongoing job creation and the long-term trend of recovery.

“None of this should be taken to imply that the situation is good,” Krugman wrote in an opinion piece over the weekend. “The U.S. economy is still far short of where it should be, and the job market has a long way to go. But the employment data do suggest an economy that is slowly healing.”

These mixed results indicate that it will continue to be key for every business to expand with caution and focus on assembling a solid core of high-caliber professionals to carry the company forward through these lean times. Corporate recruiters can help businesses ensure speed and quality when conducting an executive or financial professional search.

The U.S. Securities and Exchange Commission (SEC) is currently looking to increase its data-gathering capabilities, following criticism that it has fallen behind the times and can no longer adequately foresee coming crises, due to the rapid development of high-speed trading directed by computers.

Such trading has come to account for over 50 percent of U.S. equity volume, according to research firm Tabb Group. This figure is up significantly from 2007, when high-frequency strategies constituted 35 percent of total trading activity.

Gregg Berman, who is set to head up the SEC’s new office of analytics and research, told Bloomberg BusinessWeek that the point of increasing the commission’s scrutiny of modern trading methods is to determine how the organization can act as an effective risk mitigator for the trading system.

“What we will focus on is trying to shed more light on some of the big outstanding questions about market structure,” said Berman.

He went on to suggest that the key to effective regulation is to ask the right questions and realize that even comprehensive data collection doesn’t reveal all the answers.

“The art of quantitative analysis is knowing what you’re supposed to plot on the X-axis versus the Y-axis so it actually reveals something interesting and actionable,” Berman told Businessweek. “It’s about knowing when the result tells you something real and when it’s just an artifact of the data. Sometimes quantitative analysis requires serious math and writing computer programs that go through a complex algorithm, but not always.”

Berman’s explanation underscores the fact that navigating modern financial markets can be incredibly complex in the fast-paced economy of the 21st century. Working with an interim investment analyst can help companies ensure that they are making smart decisions with their money.

CFO Magazine recently reported on an interesting trend that appears to be taking shape in the executive world.

At many companies, chief financial officers (CFOs) are being tasked with the responsibilities more commonly associated with chief operating officers (COOs).

The publication cited a survey showing that, in the year 2000, 47 percent of the companies included in either the Fortune 500 or S&P 500 had COOs. Now, in 2012, only 35 percent of them have a C-level officer who is specifically in charge of operations. According to the news source, corporate finance chiefs are increasingly being asked to take charge of operational responsibilities as COOs drop in number.

This may be a sign that CFOs are going to be moving up in the line of executive succession. Finance chiefs are often talked about by media commentators as hypothetical replacements or potential interim chief executive officers (CEOs) in the event of an unexpected departure.

The COO position has often been spoken of as a stepping stone to the chief executive’s job. And, this is an idea that has some evidence behind it. In one relevant example, Apple’s current CEO, Tim Cook, was the company’s operations chief for years before he assumed the top office.

Even if assumptions about CFOs advancing in the line of succession prove to be unfounded, it is still clear that CFOs are taking on an increasingly central role at many corporations.

And, with CFOs taking on more operational responsibility, it is critical for companies to connect with sharp, capable individuals when conducting a financial professional search. Working with professional recruiters can help a business execute a fast, effective search.

Both the S&P 500 and Dow Jones Industrial Average – two of the most closely watched stock market indexes – gained ground early this week after newly released data on manufacturing development exceeded economists’ expectations, which buoyed investor confidence.

The Institute for Supply Management raised its factory index to 51.5 in its report on economic activity in September – up from 49.6 in August. Economists surveyed by Bloomberg had anticipated a much smaller gain, projecting a September reading of 49.7.

James Paulsen, chief investment strategist at Wells Capital Management, told Bloomberg Businessweek “the fact that manufacturing is beginning to recover will significantly reduce fears of a potential U.S. recession.”

Paulsen also cited an apparent easing of concerns regarding the financial situation in Europe, referring to the increase in manufacturing activity as an indication that global demand was starting to strengthen and solidify.

The jump in factory output is timely, as the U.S. government and private sector partners have teamed up to launch a “Manufacturing Day” initiative, set for October 5. Members of the public are being invited to tour local manufacturing sites and learn about both the history of the industry and the present situation.

This increase in optimism may have some business owners thinking about how to position themselves to capitalize on economic growth. For companies that are on the fence about expansion, particularly with regard to hiring plans, having the right data about market conditions is critical. But, so is the ability to interpret pertinent information and predict what the mid- and long-term trends will be.

Working with the interim experts at a financial project consulting service can help business leaders make sense of market activity and economic news, allowing them to make better decisions at critical moments.

New reports indicate that the public’s overall level of optimism about the U.S. economy is on the rise, particularly among consumers. This is considered to be critical, as consumer spending constitutes nearly 70 percent of economic activity in the United States.

One positive indicator is an increase in the Consumer Confidence Index, which rose considerably from 61.3 in August to 70.3 in September. The Index – maintained by The Conference Board, a nonprofit business research organization – is updated regularly, based on the results of a monthly Consumer Confidence Survey.

In a press release, Lynn Franco, director of economic indicators at The Conference Board, broke down some of the specific factors that caused the noteworthy nine-point increase in the Confidence Index.

“Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation,” said Franco. “Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months.”

This increase in confidence could spur an expansion of some companies’ hiring plans, on the belief that consumers, who are feeling more financially secure, will increase their spending on a number of goods and services that they have been going without during the economic downturn.

However, the recovery remains fragile and no company can afford to waste time and money on a new hire that won’t work out in the long term. This is particularly true with regards to filling high-level positions. Working with a recruitment firm can aid a business in conducting a fast, effective executive or financial professional search.

We’ve previously discussed how the U.S. presidential election may impact U.S. businesses’ financial plans. However, after November, we will also see the effects of Congressional contests realized. The composition of key committees may be altered next year, which could have wide-ranging implications.

There are a number of Congressional committees that are of particular importance for financial professionals and the businesses that they serve, such as the powerful Appropriations Committees, which play a key role in controlling the funding of government operations.

The Senate is seen as a major battleground. With 23 seats currently occupied by Democratic lawmakers and 10 held by Republicans being contested in elections this year, it is very possible that control of the Senate will shift from one party to the other. Democrats currently hold a thin 53 to 47 majority, including two independents who caucus with the party.

The House of Representatives, meanwhile, is likely to stay under Republican control. The party currently holds 242 seats, but needs to retain only 218 to maintain its controlling majority. Anything is possible, however, as the entire 435-member body is up for reelection this year.

Of course, the results of the presidential election will also be critical. The president has the authority to appoint many of the regulatory officials who oversee the nation’s economic system. This is especially true when you consider the additional regulatory bodies and policies created as a result of the 2010 Wall Street Reform and Consumer Protection Act, which commonly referred to merely as “Dodd-Frank.”

However, the implementation of Dodd-Frank is far from complete, and a major shift in the control of key Congressional committees could result in an alteration of the law.

Regardless of the outcome of the election, it is clear that times will continue changing and businesses will need to adapt. This requires ongoing analysis by fiscal experts. Recruitment firms can help companies conduct a fast, effective financial professional search that equips them to study their situation and make solid business decisions going forward.

California Governor Jerry Brown has led a high-profile effort to close the state’s budget gap since taking office in 2011.

Earlier this year, Brown signed a budget that contains deep cuts to public services. At the time, Brown said the budget “reflects tough choices that will get California back on track.”

The budget also assumes voters will approve $8 billion worth of temporary tax hikes when they hit the ballot box in November. Brown has campaigned heavily in support of the tax increase, calling it necessary to close the state’s $15.7 billion budget deficit.

However, on September 20, the State Budget Crisis Task Force – an independent organization dedicated to studying states’ fiscal problems – published a report indicating that California’s outstanding public debt is much greater than officials previously believed. The group’s researchers uncovered a significant amount of financial liability that did not show up in the state’s earlier tallies, putting California’s total debt level between $167 and $335 billion.

Much of this “hidden” debt stemmed from pensions and healthcare coverage promised to public workers, as well as delayed highway maintenance and a project to bring local drinking water up to federal standards.

All private businesses and public organizations have an obligation to ensure that their spending plans will align with their ability to generate revenue. Working with the interim professionals at a financial project consulting service can help companies, nonprofits and even local governments determine how to move forward in a way that lays the foundation for future success. Whether this requires belt-tightening or the gathering of additional resources, qualified financial professionals will be able to help an organization thrive.

As the U.S. trade deficit – the difference between the amount of goods and services purchased from abroad and the amount exported – has expanded, many Americans have expressed frustration at what they see as using the nation’s wealth to support jobs in other countries. The trade imbalance between the U.S. and China is particularly troubling for many people.

However, the real relationship between international trade and domestic employment is more complex.

Many imports are either raw materials or component parts that go on to become critical inputs for manufacturers based right here in the U.S.

This makes the overall impact of expanded global trade on domestic employment difficult to calculate with any level of precision. Trade agreements create new jobs as a result of expanded export opportunities or access to cheaper industrial inputs. However, free trade can also eliminate U.S. jobs, as some companies give in to the temptation to capitalize on the availability of cheap labor in other countries.

In reality, jobs are constantly being created and destroyed by market forces, and this would be the case – albeit, on a lesser scale – even without the rapid expansion of international trade in the last few decades.

Companies that are interested in evaluating international opportunities still have to contend with a variety of obstacles, despite the widespread implementation of free trade agreements and expanding membership in the World Trade Organization. The professionals at a financial project consulting service can help a company capitalize on opportunities while mitigating risks.

For instance, an international tax consultant can help a company determine any unusual liabilities it may be subject to as a result of opening a subsidiary in a foreign company. It is critical to act carefully in unfamiliar markets, which is why access to financial expertise is so valuable for firms pursuing opportunities abroad.

The U.S. Small Business Administration (SBA) is currently seeking public input on two new proposed rules that it unveiled on September 14. The changes would revise the definition of “small business” for three sectors in the North American Industry Classification System (NAICS).

For the Agriculture, Forestry, Fishing and Hunting sector, the SBA has proposed raising 11 size standards, which would increase the number of U.S. firms with access to SBA loans and other programs by up to 7,500.

The agency also reported that it wants to increase 32 revenue-based standards and five asset-based standards for companies in the Finance and Insurance sector, as well as two size standards in the Management of Companies and Enterprises sector. In addition, the SBA proposed the use of average revenues, rather than average assets, to measure the size of international trade financing firms.

SBA officials estimate that if all of the proposed changes to the latter two sectors are implemented, it will allow over 7,400 more firms access to SBA programs.

These proposals are part of a comprehensive review of all size standards currently being undertaken as a result of the 2010 Small Business Jobs Act. The intention behind this effort is to enable enterprises to retain their small business status while growing, ensuring that they are eligible to benefit from the SBA’s loan programs and federal agencies’ small business procurement opportunities.

However, some business owners may not be entirely clear on what these classifications mean or what effects they may have. Any companies interested in finding out how they can benefit from related programs or any other government incentives should consider contacting a financial project consulting service. Working with interim financial professionals can help a company capitalize on opportunities as they arise.