Finance executives also predict a slight increase in the hiring of offshore workers, even as U.S. hiring is expected to decline by approximately 3%, indicating that some companies are continuing to seek low-cost labor overseas. (See “The New Calculus of Offshoring.”)
Norman Boling Jr., CFO of Compact Power, a small manufacturer of landscaping and construction equipment, has seen his workforce shrink from more than 500 employees to 350 over the past year. But the company’s service business, which maintains machinery for companies like Wal-Mart and Best Buy, has remained stable, and Boling is exploring new avenues for growth.
“I think we will staff back up,” says Boling, “but we’ll be hiring in different areas.” The company just signed a deal with Home Depot to run the retail giant’s large-equipment rental business, a move Boling says will lead to new hiring.
With a year of turmoil behind them, some CFOs are embracing the lessons of the recession. “It’s good for everyone to sharpen their pencils and ask, ‘Do we need all this?’” says David Joaquin, finance chief at Lyons Group, a Boston-based company that oversees 25 restaurants. Joaquin says revenues have held up well, but he is closely tracking capital expenditures. “New spending will depend on a very specific, situation-by-situation analysis,” says Joaquin. “In the past, we might have given a restaurant manager $300,000 to replace equipment if he gave us a list of 10 things he wanted. Now, it will literally be, ‘Let’s replace this fryolator.’”
Still, Lyons Group plans to grow, with at least three new venues on the way. “These times provide a great opportunity to go out and strike a great deal,” says Joaquin. As finance executives grow more confident about their businesses’ chances for survival, perhaps more will dare to go out and do great deals — and create some jobs while they’re at it.
Kate O’Sullivan is a senior writer at CFO.