People Power: Business across the globe to employ more staff to accelerate growth

People Power

Business across the globe to employ more staff to accelerate growth

The Regus Business Tracker – Edition 3 October 2010

1100 locations 500 cities 85 countries regus.com

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Management Summary

The Regus Business Optimism Index has risen by four points over the last six months,

indicating positive news for the global economy. The index combines current company

performance with future outlook indicators

In a further positive indicator, respondents to the six-monthly Business Tracker survey are

looking to increase headcount, and attract new staff to accelerate growth

45% of companies globally expect to add staff to their payroll in 2011, compared with 9%

expecting to cut staffing levels, resulting in a net positive employment result of 36% for

2011.

Companies reporting revenue growth in the last year are net positive (+19%), and indeed

firms reporting growing profits are also in a net positive position (+10%).

This hard evidence of positive economic trends gives credence to high expectations of

revenue growth in the coming year (+69%).

However, a net 41% of companies are still looking to reduce their overheads, through other

means than reducing staff – probably by more efficient infrastructures and business

process management techniques.

While firms are still aiming to achieve further economies in their businesses, this is to be

achieved in areas other than human resources, such as business process automation,

flexible workspace solutions, outsourcing or pay-as-you-use services

As companies ready themselves to grasp the opportunities offered by recovering

marketplaces firms will be looking to increase headcount. However, in order to meet their

overhead reduction targets, firms are also likely to pursue flexible working practices, from

flexi-time to tele-working and offering equipped locations closer to home, in order to attract

new talent and retain existing staff.


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Geographical highlights

Asia’s emerging giants continue to celebrate their growth. Around six out of ten companies

in India and China have experienced rising revenues in the past 12 months.

Chinese companies show a slightly greater ability than Indian companies to translate higher

revenues into higher profitability: 65.3% of Indian companies have seen revenues rise;

55.6% have seen profits rise; in China 60.5% saw revenues rise, and 54.5% saw profits

rise.

China and India’s performance contrasts with Asia’s longer-established giant: Japan.

There, around one-third of companies saw profits rise.

Employment prospects, in the shape of the proportion of companies intending to employ

more staff, are universally positive, at 62% in China, 44% in Japan and 38% in India

The USA remains among the more pessimistic countries. Companies reporting a rise in

revenues or profits were below average. Nevertheless, the USA reported above an above-

average number of companies whose revenues and profits have remained flat indicating

that although improvement has been hard to come by conditions may have at least

stabilised. In spite of measures targeted to improving the labour market, USA firm’s

expectations to hire new staff remain slightly below the global average at 39% compared to

45%.

Confidence levels in Western Europe are relatively low - in France, Belgium and Spain

especially. However, Germany and the Netherlands are in sunnier mood, with more than

seven out of ten companies expecting to increase their revenues in the next 12 months.

Spain has the lowest optimism level of any of the major countries: almost half the

companies surveyed think that their revenues will fall or stay flat. This reflects their

underperformance in the past 12 months, with fewer than three in ten companies reporting

a rise in revenues.

All Western European countries except Spain have seen a rise in the Business Optimism

Index score, accompanied by a net positive proportion of companies intending to employ

more people in the coming months. And even in Spain, the employment indicator remains

positive, presumably indicating the recognition of a need for excellent staff to generate

business growth.


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Introduction

The global economy has continued its recovery in 2010, to the extent that, halfway through the

year, the International Monetary Fund (IMF) raised its 2010 growth projections for world output

from 4.2% to 4.6%. In its World Economic Outlook, it pointed to an array of positive indicators,

including growth in private demand, consumer confidence, industrial production and trade, as

well as employment. On this basis, it projects that world output will rise by 4.3% in 2011.1

In the USA measures to stabilize financial markets, guarantees and stress testing led to

average 4% GDP growth (seasonally adjusted annual rate) in the second half of 2009 which,

however, slowed to 2.7% in the first quarter of 2010. Recovery has indeed been slow by

historical standards and is still dependent on policy support. 2 Unemployment remains high at

9.6% although private sector payroll continues to increase slightly, a trend which supports our

findings indicating that there is reason for optimism on the employment front as 39% of USA

companies intend to increase head count in the coming year.3

Driving much of the 2010 recovery was robust growth in Asia. The IMF expects real GDP in

Asia to grow by 7.5% in 2010, compared with 3.6% in 2009. In 2011, it predicts real GDP

growth of 6.75% in Asia, boosted by buoyant exports and domestic demand. China and India,

respectively, are expected to produce real GDP growth of 10.5% and 9.4% in 2010, and 9.6%

and 8.4% in 2011.

But the IMF also pinpoints causes for concern. In contrast to the brightening skies in the

emerging and developing economies of Asia and elsewhere, the skies in Europe remain

overcast. The recovery in France, Germany, Belgium & Luxembourg, and the Netherlands

remains fragile: none is expected to grow by more than 1.6% in 2011. The UK forecast is only

slightly more positive, at 2.1%. The projection for GDP growth in Spain in 2011 is just +0.6%,

although this is an improvement on the projection for 2010: -0.4%.

The IMF highlights other sources of worry, too, saying that the financial turbulence of 2010 has

increased the downside risks. Governments – especially European governments - need to

1 http://www.imf.org/external/pubs/ft/weo/2010/update/02/index.htm 2 http://www.imf.org/external/np/sec/pn/2010/pn10101.htm 3 http://www.bls.gov/cps/

http://www.imf.org/external/np/sec/pn/2010/pn10101.htm


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rebuild confidence and stability, and tackle financial sector and structural reforms. Worries

about sovereign debt persist and could lead to financial stress and contagion.

Critically important is the issue of employment, frequently cited by economists as an indicator of

sustainable economic growth. The IMF has recently reported that world unemployment has

increased 30 million to 210 million since 20074. Unemployment has a major impact on any

economy, increasing state spending and reducing taxation income. Therefore the positive news

on employment coming out of the latest Regus Business Tracker survey is of tremendous

economic significance.

Thus, there are multiple downside risks, but even taking these into account, the IMF paints a

largely positive picture. The clear geographical differences identified by the IMF and other

economic forecasters will help businesses map out their future strategies, informing their

decisions about where and how they need to allocate their resources in future, and where and

how they might see revenue and profits growth.

The Regus Business Tracker study

When deciding on their objectives and targets for the coming years, businesses need clear

information on economic and business trends in key markets around the world. They want data

that affords clear comparisons between different markets; they want to know about the trends

and conditions being experienced by businesses like them; and they want to know about those

businesses’ views about future trends.

The Regus Business Tracker Survey - of which this is the third edition - gives businesses

exactly that information. The survey is based on over 10,000 responses from businesses

around the world, in both advanced and key developing economies where Regus operates. The

pool of respondents is broadly representative of industries in each region. Companies 78

countries were asked about their revenues and profits over the past year, and about their

revenue expectations for the next 12 months. Their responses provide an excellent measure of

the conditions and prospects facing businesses across the globe. Such a measure provides a

powerful tool for companies as they draw up their own predictions and plans for the next 12

months and beyond.

4 IMF, Sharp rise in unemployment since 2007, 2nd September 2010


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The Regus Business Optimism Index

Every edition of Business Tracker presents an updated view of the Regus Business Optimism

Index. This index is a measurement formed on an aggregate of positive forward-looking

statements worked out on a model combining year-to-date revenue and profit trends with views

on the expected economic upturn in the coming six months. The goal of the Optimism index is

that of providing a single point of reference of the survey’s key findings, with a benchmark

average that was set at 100 in the first publicly published edition of the Regus Business tracker

in October 2009.

October 2009 April 2010 October 2010 Global Average 100 94 98 Spain 74 68 59 Japan N/A 77 84 USA 94 80 87 France 85 85 93 Germany 100 89 95 Netherlands 94 90 95 Mexico 93 97 96 Belgium 91 89 99 Canada 112 108 99 UK 79 81 100 Australia 109 132 107 South Africa 127 105 108 India 138 167 119 China 105 108 127

Key Growth Decline

The latest edition of the Regus Business Optimism Index paints a far rosier picture compared to

the April 2010 edition. Globally optimism is climbing up to the levels recorded in October 2009

with a far greater proportion of countries revealing that they are optimistic about their outlook

than six months ago. Overall Western Europe has become more optimistic with France,

Germany, the UK, Belgium and the Netherlands all recording an increase in optimism levels.

Spain represents an exception as optimism continues to plummet exacerbated by record

unemployment and a general government deficit of 11.2% of GDP in 2009.5

5 http://www.imf.org/external/np/sec/pn/2010/pn10106.htm



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While the USA can boast an increase in optimism levels, Canada has recorded a steady

decrease since October 2009. In Asia, Chinese bullishness is on the rise while Indian prospects

are somewhat muted and Japan records a substantial increase in optimism. Perhaps as a result

of influx of capital after the World Cup 2010, South Africa records higher levels of optimism than

those found in April while Australia is noticeably less bullish. Finally, Mexico records a very

slight inflection in optimism probably due to the unsettled security situation currently disturbing

the country.

Recovery will boost employment levels

Almost half (45%) the businesses surveyed plan to add staff to their payroll in 2011, compared

with just 9% expecting to cut staff levels. This creates a net positive employment trend of 36%

for 2011. Since economists frequently cite rising employment levels as a strong indicator of

sustainable economic health, the findings of this latest Regus Business Tracker survey would

seem to offer strong evidence for global recovery and growth, fuelling taxation income and

reducing levels of state support.

Only in France, where unemployment stands at similar levels to the US at 9.6%,6 are a

sizeable number of businesses – 23.7% - expecting to cut staff in 2011, and despite this greater

turbulence in the French employment market, the country still registers a net positive proportion

of companies intending to increase employment numbers.

Employment increases in Western Europe are strongest in Germany, which has also

experienced an export boom recently, and where pension schemes for instance were protected

from the worst effects of the financial markets crisis because of their non-reliance on equity

investments.

China (62%), Japan (44%) and Australia (55%) report a very healthy outlook on the proportion

of companies intending to increase staffing levels, Interestingly, Canada (41%) makes a

stronger showing than the USA (32%), perhaps indicating the long-tail effect of the sub-prime

crisis in the United States. Finally, even in Spain, which has seen a severe drop in its Business

Optimism Index score, employment prospects remain positive, presumably indicating that actual

economic growth cannot be achieved without access to essential human resources.

6 http://www.bls.gov/ilc/intl_unemployment_rates_monthly.htm


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At the same time, a net 41% of companies are looking to reduce their overheads – though not, it

seems, by cutting staff. It seems, therefore, that they will be looking to use other techniques,

such as more efficient infrastructure and business process management techniques, to cut

overheads and raise profitability.

Net Staff Addition

0% 10% 20% 30% 40% 50% 60% 70%

FR

Belgium

Spain

ND

USA

UK

SA

Global Average

India

DE

Canada

Mexico

Japan

Australia

China

The desire to cut overheads is particularly strong in continental Europe, with 60.6% of French,

56% of Belgian, 56.5% of Dutch, and 63.5% of Spanish companies saying they intend to do so

in 2011.

Given that, globally, companies intend to increase headcount, demand for top talent will

become more pressing and firms will have to seriously devote time to planning strategies apt to

attracting top staff and retaining their best employees who having endured the hardships

imposed by the downturn, from frozen salaries to overwork may be tempted by the appealing

offers of competitors.


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In addition to this planned increases in headcount overhead reduction was a much cited

objective for most companies, an indicator that although companies want to remain lean they

also realize that they need the skills of their staff to fully grasp the opportunities offered by

recovering marketplaces. Therefore the recruitment challenge and the overhead reduction

target are likely to result in an increased take up of flexible working practices ranging from the

employment of more part-time or freelance workers, to offering existing and new staff the option

to work remotely whether closer to home or at home and to select tailored flexible working hour

options that reconcile professional needs with personal life.

The Business Tracker: An international overview

To delve into a little more details, the October 2010 edition of the Regus Business Tracker

incorporates a macroeconomic section which gauges businesses’ views of their performance

during the previous 12 months and their expected performance over the next 12 months. This

follows the pattern of the two previous Business Tracker surveys. Like the previous ones, the

October 2010 survey also asks for businesses’ assessment of the pace at which they expect to

economic recovery to advance in their country.

When exploring businesses’ experiences of the previous 12 months, the survey considers both

revenues and profits. This is important, since they illustrate two different aspects of national

performance: profit indicates the productivity of a business, whilst revenue trends indicate the

size of infrastructure that a company can maintain.

The October 2010 survey shows that businesses’ experiences have improved in the last six

months. While in April 2010 42% of companies had seen a rise in revenues in the past 12

months that number is now up to 44%. In this edition of the Regus business tracker fewer

businesses (25%) had seen revenues fall compared to 30% in April 2010. In addition to this, the

number of firms reporting profit growth is net positive at 10%: with 38% seeing profits rise and

28% seeing them fall.

But behind the net rise, there is a modest slowing in the rate of economic recovery compared to

the responses given six months ago. Companies globally have in fact pushed back their

expectations for the full momentum of economic recovery from December 2010 to April 2011.

While slippage of the expected tipping point at which the full swing of recovery will take place is

found in most countries. Germany, where 74% of companies recorded a revenue rise in the


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past 12 months, remains the bullish exception, leaving unaltered its expectations for full

recovery in January 2011.

France and Japan have pushed back their expectations more than other geographies studied

postponing them by a full 7 months. They are shortly followed by Mexico and the USA which

has pushed back the full momentum of recovery by 6 months. China, India, Australia and

Belgium have suffered only a 4 months slippage while the UK, Canada and South Africa expect

the full swing of recovery not to take place for almost another semester.

Despite this modest slippage other indicators are painting an ever more positive picture. In

October 2009, 65% of companies globally were optimistic that they would increase revenues

over the next 12 months, compared with the 44% who report that they have achieved this in

practice in the October 2010 survey. Despite the slower pace of recovery, there is no sense that

disillusionment has crept in: 69% of companies expect their revenues to rise over the next 12

months; this despite the fact that 38% do not expect recovery in their country to advance until

the second half of 2011.

Globally, and in most major economies, the number of companies reporting increased revenues

and profits outstrips the number reporting flat revenues and profits; this in turn outstrips the

number of companies reporting declining revenues and profits. Only in Spain do companies with

declining revenues and profits (41.3%) outnumber those who report a rise (29.7%).

Whereas in most countries the proportion of companies reporting a rise in revenues or profits is

broadly the same, there are exceptions here too. In Mexico, 42% of companies have seen

revenues rise, and 27.7% have seen revenues stagnate. But just 25.5% have seen profits rise,

and 49.6% have seen them remain flat. There is clearly scope for improvements in productivity

by Mexican companies.

As for the ‘winners’ in terms of the countries with the rosiest experience of rising revenues and

profits, India and China lead the way. Australia, South Africa and the UK also exceed the global

average, with South Africa’s economy perhaps boosted by the FIFA World Cup. The country

with the saddest tale to tell is Spain, which is still beset by unemployment rates of almost 20%7

7 http://www.imf.org/external/np/sec/pn/2010/pn10106.htm



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and the aftermath of the real-estate bust: over four out of ten companies there have seen

revenues and profits decline.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Spain

FR

Japan

DE

ND

Belgium

USA

Mexico

Canada

Global Average

UK

SA

Australia

China

India

Revenues risen in the past 12 months Profits risen in the past 12 months

An optimism spanning continents and sectors

With both economic indicators and many companies’ own experience showing that recovery is

underway, there are high expectations of revenue growth in the coming year: 69% expect to

increase company revenues in the next 12 months. Only 8% expect them to decline.

This optimism spans businesses of all sizes and in most sectors. Even in retail, the sector least

confident about the 12 months ahead of them, more than half (54%) of respondents expect

revenues to rise in the next 12 months.

Companies in India and China remain bullish about their future prospects, with 87.5% and

78.8%, respectively, expectant of rising revenues in 2010-11. And still in the afterglow of the

World Cup, 81.5% of South African companies expect a rise in revenues over the next 12

months.


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Those apparently expecting the greatest transformation in their fortunes are to be found in

Germany and the Netherlands. In the former the number of companies expecting revenues to

rise in the future is about 36 percentage points higher than the number who have seen them

rise in the previous 12 months; in the Netherlands, it is 33 percentage points higher.

Percentage of companies expecting revenues to rise in the next 12 months

India 87.5% South Africa 81.5%

China 78.8% Germany 74.1% Canada 72.8%

Netherlands 72.6% Australia 70.1%

Global average 69.0% UK 65.8%

Mexico 65.7% USA 64.5%

France 60.8% Japan 59.6%

Belgium 58.0% Spain 51.6%

Asked to look at the wider picture of the momentum of economic recovery in their own country,

companies have mixed views. Only one in five (19%) think recovery is already advanced in their

own country. Double that number (38%) do not expect economic recovery to advance strongly

until the second half of 2011.

In some cases, there is a marked disjuncture between companies’ own experience of revenue

growth and their views about when economic recovery will be felt. In both the US and the UK,

for example, over 40% of companies report rising revenues, but less than 7% think that

economic recovery is already advanced in their country. Even in China, where the IMF predicts

double-digit GDP in 20108 and where six out of ten companies have seen revenues rise in the

previous 12 months, 60% of respondents think the recovery will not gain momentum until 2011.

8 http://www.imf.org/external/pubs/ft/weo/2010/update/02/index.htm


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Does size affect confidence

Each edition of the Regus Business Tracker Survey looks at how company size influences

companies’ experience and expectations.

The current survey indicates that larger companies (250+ employees) have navigated the

choppy seas of recovery better than small and medium sized companies, being more likely to

report rising revenues and profits than their smaller counterparts.

0% 10% 20% 30% 40% 50% 60% 70% 80%

0-49 Employees

Global Average

50-249 Employees

250+ Employees

Profits risen in the past 12 months

Revenues risen in the past 12 months

But a company’s size appears to have less effect on its future expectations. Levels of optimism

that revenues will rise in the next 12 months are consistent across companies of all sizes: at

68% for both small and medium-sized companies and at 71% for larger companies. There is

also broad agreement about how advanced the economic recovery is in companies’ own

countries.

The optimism and ambition that fire the entrepreneurial spirit is evident in the future strategies

planned by smaller companies. Businesses with 0-49 employees are more likely than

companies with 250+ employees to add staff in the coming year.


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Conversely, almost six out of ten (58%) companies with 250+ employees intend to cut

overheads, compared with 41% of small companies, and 51% of medium-sized companies.

Larger companies are also more likely to cut staff than their small and medium-sized

counterparts, with 22% intending to cut staff, compared with 6% and 12% respectively.

The experience of different sectors

The Regus Business Tracker Survey compares the experiences and perceptions of companies

in different sectors. It seems that almost half the banking, insurance and finance companies

surveyed have put the financial crisis behind them, with 48% seeing a rise in revenues during

the previous 12 months. The retail sector continues to feel the effects of consumers deciding to

repay debt or save rather than spend: only 29% have seen revenues rise.

The sector most confident of benefiting from economic recovery is media & marketing, with

seven out of ten (69%) companies expecting revenues to rise over the next 12 months. Even in

the least optimistic sector – retail – more than half the respondents (54%) expect to see an

increase in revenues.

In terms of firms’ future outlook, there is a broad correlation in their plans, with few stand-out

figures. The sector least likely to see employment levels rising is manufacturing and production:

here only 35% of firms expect to add staff, whereas in all other sectors over 40% of firms expect

to do so.


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Country highlights

United Kingdom

UK companies’ experience of rising or falling revenues and profits over the past 12 months

is fairly similar to the global average.

But they are less convinced than companies overseas about the rate of economy recovery:

over half of UK companies do not expect economic recovery to advance until the second

half of 2011. Only 6.6% think it is already underway.

The pressure to cut costs among UK larger companies seems especially strong: 66.9% of

companies with 250+ employees will reduce overheads in 2011, significantly higher than

the global average of 45%. Over one-fifth of large companies intend to cut staff, more than

twice the global average of 9%.

53.2% of ICT companies in the UK intend to add staff in 2011, a reflection of the fact that,

in a sector where many staff work on short-term contracts, firms can add or reduce staff

numbers relatively easily.

USA

Despite the fiscal stimulus given to the US economy in 2009-10, there is not overriding

evidence of a feel-good factor. US firms are slightly less likely than the global average to

have seen revenues rise (40.9% compared with 44%).

60% of US companies do not expect economic recovery in their country until the second

half of 2011, whereas globally only 38% of companies think this.

Retail has been especially hard hit in the US: twice as many companies have seen profits

stay flat (48.8%) as have seen them rise (24.4%) in the previous 12 months.

France

French companies have been hit hard by the fragility of the global economy. More than six

out of ten companies (63.8%) have seen revenues stay flat or fall during the past 12

months. 69.8% have seen profits stay flat or fall.

The French are less optimistic than the global average: 60.8% expect their revenues to

rise, as opposed to 69% of companies globally.


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There seems to be a feeling among French companies that they are burdened with dead

weight. Almost a quarter (23.7%) want to cut staff (the global average is 9%) and 60.6%

want to cut overheads.

Germany

German companies have emerged from recession in good spirits. Almost three-quarters

(74.1%) think they will see increased revenues in the next 12 months.

Germany’s mighty manufacturing and production sector is especially optimistic: 90.5% of

companies expect their revenues to rise in the next 12 months.

37.2% of German businesses think economic recovery in their country is already underway,

whereas only 19% of companies globally think this.

German companies demonstrate the greatest ability to translate revenue growth over the

last 12 months into profits growth, with the number reporting profits growth (37.2%) just

less than 1 percentage point lower than the number reporting revenue growth (38.1%).

Netherlands

Unlike their neighbours in Germany, Dutch companies are not convinced that economic

recovery has begun – even though almost four out of ten (39.3%) have increased their

revenues in the past 12 months, only 14.1% think that recovery is underway.

33.3% of Dutch companies think economic recovery in the Netherlands will advance in the

first half of 2011; 38.5% think it will not advance until the second half of 2011.

In contrast to the global figures, larger Dutch companies have underperformed smaller

ones: just 30.8% of companies with 250+ employees report revenue rises, compared with

40.5% of companies with 0-49 staff. Only 23.2% of larger Dutch companies achieved rising

profits, compared with 36.9% of smaller ones.

Belgium

Belgian companies are slightly less likely than the global average to have seen profits

(36%, compared with 38%) and revenues (40%, compared with 44%) rise. But large

Belgian companies have fared well: 60% report rising profits in the past 12 months, and

57% report rising revenues.

Belgian companies are among the least optimistic companies in the world about the next

12 months: only 58% expect revenue to rise, compared with 69% globally.


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In a country already suffering high structural unemployment,9 only one-third (33%) of

Belgian companies expect to add staff in 2011, less than the global average and the lowest

percentage among the major economies surveyed.

Spain

Spanish companies paint a gloomy picture of the past 12 months. They are the least likely

of any of the major economies surveyed to report good news: just 29.7% have seen

revenues rise, and just 25.8% have seen profits rise.

Only around half of Spanish companies (51.6%) expect revenues to rise over the next 12

months.

Companies’ future outlook on staffing are unlikely to help Spain’s high unemployment

figures: 41.2% of Spanish companies with 250+ employees plan to cut staff; only 11.8% of

these companies plan to add them. Overall, four out of ten (39.4%) plan to add staff next

year, lower than the global average.

India

Indian companies are more likely than those in any other major economy to report revenue

and profit rises. 65.3% saw revenues rise, and 55.6% saw profits rise.

Indian companies are also the most confident about the next 12 months: 87.5% expect

revenues to rise.

Such experiences and optimism lead 62.5% of Indian companies to think that economic

recovery is advanced in their country.

China

Six out of ten (60%) companies in China report rising revenues in the past 12 months, and

54.5% have seen profits rise. Larger companies have fared better than small companies,

though: 80% of larger companies have seen revenues rise, compared with 49.5% of those

with 0-49 employees.

Eight out of ten (78.8%) companies in China expect revenues to rise in the next 12 months.

Two-thirds of companies (66.5%) plan to add staff in 2011.

9 http://www.oecd.org/document/46/0,3343,en_33873108_33873261_45268718_1_1_1_1,00.html


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Unlike in other major economies, there seems little pressure for companies in China to cut

costs: only 17.1% of companies will reduce overheads in 2011, compared with the global

average of 45%.

Japan

Fewer than four out of ten (37.3%) Japanese companies have seen revenues rise in the

past 12 months. Larger companies in Japan performed better than their smaller

counterparts, though: more than half (52.1%) of companies with 250+ employees have

seen revenues rise in the past 12 months; 47.9% have seen profits rise.

Levels of optimism about the next 12 months are lower than the global average: 59.6% of

companies expect revenues to rise, compared with 69% globally.

Instead, more companies seem to look further to the more distant future: whereas only

5.0% of Japanese companies think recovery is already underway in their country, 58.2%

expect it to advance in the second half of 2011.

South Africa

South African companies expect the benefits of the World Cup to continue over the next 12

months: 81.5% expect their revenues to rise over the next 12 months, compared with the

global average of 69%.

Larger companies fared better than their smaller counterparts with 72% of companies with

250+ staff reporting a rise in revenues compared to 41.5% of small companies.

250+ employee companies were also more likely to see a rise in profits compared to

smaller companies with 77.8% of the former recording a rise compared to 38.1% of the

latter.

Canada

Canada’s experience of the last 12 months broadly matches the global average: 43.7% of

companies saw revenues rise, and 37.1% saw profits rise.

Large companies’ experience is significantly better than the global average: 92.9% of

companies with 250+ employees saw revenues and profits rise.

Canadian companies are more optimistic than their US neighbours about the next 12

months: 72.8% of companies expect revenues to rise over the next 12 months, compared

with 64.5% of US companies.


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Mexico

At the other end of the US, over four out of ten (42%) of Mexican companies saw revenues

rise. However, companies struggle to convert this into increased profitability: a much lower

25.5% saw profits rise.

This perhaps influences the fact that over half of companies in Mexico (50.4%) want to cut

overheads in 2011.

Australia

Australia’s economy largely escaped the ravages of global recession, and this is evident in

the number of companies reporting increased revenues over the past 12 months: 50.6%.

Only a fifth (20.1%) of companies saw revenues fall.

The fact that Australia was relatively unscathed by recession is played out in companies’

headcount plans for 2011: only 2.4% of companies plan to cut staff, whilst 56.9% plan to

add staff.


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Conclusion

The results of the October 2010 Regus Business Tracker suggest that companies all over the

world have emerged unbowed from global recession. Almost seven out of ten (69%) companies

expect to see revenue growth in the next 12 months; this optimism can be seen across different

continents and sectors and in companies of different sizes.

This optimism is all the more remarkable given the fact that a much smaller number believe that

economic recovery will gain momentum in their country this year. Just 34% believe it is already

underway or will happen before 2010 is out.

The difference between the two figures has two possible causes. First, companies believe

strongly in their own ability to increase revenues, even in economic conditions that are not ideal.

Second, companies are using exports and overseas operations to fuel their growth.

The survey shows the extent to which companies’ optimism is accompanied by hard-edged

practical strategies. Companies have high hopes for the next 12 months, but they also know

they face tough decisions. 45% plan to reduce overheads, rising to 60.6% of companies with

250+ employees.

But far from cutting costs by slashing headcount, a sizeable proportion of companies worldwide

– 45% - plan to take on new staff. This is a positive indicator that companies increasingly want

to invest in human capital, even while they are seeking economies in their operations. This

points to the fact they are seeking greater efficiency elsewhere – perhaps in their business

process management techniques and perhaps in their approach to infrastructure. It also points

to an intention to make increasing use of flexible workers such as freelancers and part-time

workers as well as of flexible working practices. To increase and retain their valuable human

capital companies will have to elaborate strategies that improve working practices, for example

favoring work-life balance or reducing stress while reducing their overheads significantly. For

workers there are positive indications that globally the job market is improving and that more

and more companies will be offering appealing perks such as the ability to work closer to home,

remotely or with flexible working hours.


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Methodology

Over 10,000 business respondents from the Regus global contacts database were

interviewed during August and September 2010. The Regus global contacts database of

over 1 million business-people worldwide is highly representative of senior managers and

owners in businesses across the globe. Respondents were asked about their recent

revenue and profit trends, along with their future views on a number of issues including

the timing of substantial economic recovery in their country. The survey was managed

and administered by the independent organisation, MarketingUK.


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About Regus

Regus is the world’s largest provider of workplace solutions, with products and services ranging

from fully equipped offices to professional meeting rooms, business lounges and the world’s

largest network of video communication studios. Regus enables people to work their way,

whether it’s from home, on the road or from an office. Customers such as Google,

GlaxoSmithKline, and Nokia join hundreds of thousands of growing small and medium

businesses that benefit from outsourcing their office and workplace needs to Regus, allowing

them to focus on their core activities.

Over 800,000 customers a day benefit from Regus facilities spread across a global footprint of

1,100 locations in 500 cities and 85 countries, which allow individuals and companies to work

wherever, however and whenever they want to. Regus was founded in Brussels, Belgium in

1989, is headquartered in Luxembourg and listed on the London Stock Exchange.

For more information please visit www.regus.com

Disclaimer

Whilst every effort has been taken to verify the accuracy of this information neither Regus plc nor any of its

subsidiary business can accept any responsibility or liability for reliance by any person or organisation on

this white paper or any of the information, opinions or conclusions set out here within.

http://www.regus.com/