Big Business Doesn't Plan to Help Reduce Unemployment Any Time Soon
While the CFOs of some of the largest companies in the United States are markedly moving away from cost and job cutting and focusing more on revenue growth, they remain wary of increased hiring, according to the results of a recent Deloitte survey.
The CFO Signals quarterly survey, which tracks the thinking and actions of CFOs representing many of North America's largest and most influential companies, indicates that growth may not translate into jobs in the near term. Year-over-year domestic hiring growth projections for the first quarter of 2011 remained low at 1.8 percent, similar to projections from the previous three quarters.
The CFOs say it will take a 20 percent revenue gain for most of them to increase domestic hiring substantially. Also, a 5 percent increase in revenue would have little or no impact for 70 percent of the surveyed companies, and a 10 percent revenue increase would substantially increase hiring for only 11 percent of companies.
The prospects of 20 percent revenue gains are not good, according to the CFOs surveyed. The projections for both revenues and earnings are substantially lower than estimates from the second and third quarters of 2010 -- possibly indicating that many of the strongest recovery gains have already been achieved.
"Having ridden a wave of recovery -- related improvements for the past few quarters, companies are seeking growth on their own terms," said Sanford Cockrell III, national managing partner, CFO Program, Deloitte LLP. Whatever those terms may be, it doesn't appear they will involve creating jobs for American workers any time soon.
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