A new study by Deloitte of the perspectives of mid-market executives reveals several contradictory attitudes about the economy, hiring and technology trends.
The study of 500 mid-market executives found that they prefer to optimize their existing assets instead of expanding their talent base, as more of them recognize the importance of leveraging their existing talent through training efforts. In addition, companies are becoming more financially self-sufficient. Fewer mid-market executives plan to secure external financing in 2012 than in last year’s survey of the mid-market by Deloitte. The sector, according to Deloitte, includes companies with between $50 million to $1 billion in annual revenue.
“The respondents generally have a reasonable sense of optimism about their individual prospects for growth in revenues and profitability, but there is less optimism than a year ago about growth in the U.S. economy,” said Tom McGee, national managing partner and head of Deloitte Growth Enterprise Services, who oversees all of Deloitte’s work with mid-market companies in the U.S. “When asked about their company’s own growth prospects and outlook in the future, they’re more optimistic than about the overall U.S. economy.”
The survey found the mid-market to be focused on productivity and balance sheet health. “The combination of those factors has led to a reasonable sense of optimism,” said McGee.
Approximately 40 percent of the respondents expect their employee base to grow over the course of the next year, but they don’t anticipate hiring to be robust. While mid-market companies are continuing to invest in talent, they are still finding it challenging to recruit employees with the necessary skills, particularly those with engineering and technology backgrounds. “There’s a little bit of a skills mismatch between job openings and those available to fill them,” said McGee.
More mid-market companies are looking to invest in cloud computing, automation of business processes, and data analytics tools, he noted, as companies leverage Software as a Service to save money. However, the study found that many companies remain apprehensive about the uncertainty in the economic and political future, with worries about the financial problems in the Eurozone, the fall elections in the U.S., the federal budget deficit, expiring tax laws and the housing market. But that isn’t leaving companies frozen in place awaiting the outcomes of those situations.
“I would not characterize mid-market companies as standing still,” said McGeee. “They’re adapting, with a continued focus on balance sheet health, maintaining adequate levels of cash, and productivity. Those continue to be front and center for mid-market companies.”