Uncertainties continue to affect global businesses

10 April 2019 Consulting.us

Europe has Brexit. The US and China have their trade war. And a tightening labour market is set to increase business costs, while credit conditions tighten. Business optimism overall has fallen in Europe and the Asia-Pacific (APAC) region, while Europe has seen export expectations decrease. Disruptive technology and business models also continue to be seen as risks to businesses worldwide.

It is shaping up as a year of large-scale uncertainties, the impact of which are likely to have impact on global growth, which could affect over-leveraged companies, resulting in additional uncertainties. To better understand the current situation, as well as offer predictions for 2019 and beyond, Grant Thornton recently released its “Thriving in 2019’s Global Economy” report. The report is part of its wider “International Business Report.”

Global business confidence and export expectations

While uncertainty is set to continue as the trend going into 2019, the survey shows a relative mixed bag in terms of business confidence in the final quarter of 2018. US respondents are less optimistic relative to Q2, but their optimism is still above the global optimism score (39%) at a net 58. Optimism in Latin America, meanwhile, increased in the latest survey, coming in at a net 48% optimistic. Europe saw a fall in overall optimism – although still hitting “positive” territory – at 28%. The developing APAC region is the least positive however, with -12% overall. The APAC region as a whole is relatively positive, at a net 34%, but lower than the global average and its previous response. The emerging APAC region continues to have net positivity above the global average, at 58% of respondents.

While optimism has fallen, the study suggests that overall a net 21% of global respondents expect exports to increase over the coming 12 months. African respondents are very positive, with a net 44% – an increase on the previous survey. European respondents are a net positive 19%, but note a decline on their previous optimism. The APAC region expects a net positive of 24%. 

Growth softens but remains robust

Economic uncertainty was up 22 points to 50% net from Q2 2018, although the overall growth picture for the global economy remains relatively robust for 2019, even with some softening on the previous year, at 3.7% and 3.5% respectively. Advanced economies are likely to see a strong decline in growth when compared with emerging markets, with an expected decrease from an average 2.3% last year to 2% this year. Developing economies could see a slight average growth decrease, from 4.6% to 4.4%. Growth in developing economies, however, could increase to 4.9% by 2020.

There is relative positive momentum overall, with unemployment rates falling to their lowest levels globally since the 1980s, which is likely to see wages and consumer spending rise. While the labor market is tightening, many respondents remain wary about access to skilled labour, with various new business trends requiring expertise that can come at a premium

Top-level outlook for 2019

While global uncertainties create macroeconomic headaches, businesses also face disruption and insurgent business models. The effect of start-ups that are able to quickly disrupt legacy models as well as capture large tracts of customers from across segments has seen considerable investment in acquiring companies and talent, as well as investment in R&D and innovation. The report suggests that last year’s investment in R&D was up a net nine percentage points to net 31% in Q4 2018, from 22% in Q2. The increase was led by the US, in part due to tax code changes, with a net increase to 34% increasing investment. India saw net investment increase from 21% to 51% of respondents. Technology, too, continues to be a player, with a net 42% of respondents actively investing in the space.

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Korn Ferry rolls out SoFi financial wellness products to its US workers

16 April 2019 Consulting.us

Consulting firm Korn Ferry has partnered with personal finance firm SoFi to offer financial products and tools to its US workforce.

Financial stress is a heavy burden on US workers, with long-term stress often leading to mental and physical conditions. Stress reduces the ability of the immune system to fight off bacteria and viruses, while chronic stress can impair memory and increase aggression.

Financially stressed workers are also less productive, with an estimated $250 billion in US annual wage losses attributed to the effects of stress, according to a 2017 Mercer study. The average American employee spends 13 hours per month worrying about their financial security.

The central issue related to stress at work is low pay, according to surveyed employees, followed by inadequate staffing and company culture.Korn Ferry rolls out SoFi financial wellness products to its US workersFirms will sometimes implement financial wellness programs as a part of their overall benefits package, aiming to create happy and healthy workers with hopefully less outlay than massive salary increases. For firms that pay competitive wages – like most consultancies – financial tools such as investment advice and budgeting software are another feather in the cap of an impressive overall benefits package meant to attract and retain top-end talent in a shrinking market.

Likewise, human resources consultancies such as Korn Ferry have to set a good example with their own benefits and practices outside of the simple goal of effective talent management. After all, how can you expect companies to trust you as a benefits advisor if your own organization doesn’t have a first-class set-up?

To this end, Korn Ferry has further expanded its financial wellness offering for its US employees through a partnership with online personal finance company SoFi. Korn Ferry workers will now be able to access SoFi’s student loan refinancing, personal loan, home loan, and investing products, as well as financial guidance via SoFi financial advisors.

“We offer a complete package of wellbeing benefits that appeal to our colleagues’ physical, emotional, financial, and social wellbeing,” Brian Bloom, vice president of global benefits at Korn Ferry, said. “This new financial offering from SoFi is a natural addition to our Korn Ferry Cares package. We continue to look for new offerings and services to help our global Korn Ferry colleagues and their families.”

Korn Ferry’s global workforce is more than 50% millennials and Gen Z – groups that would be especially well served by SoFi’s refinancing, loan, and advisory offerings.

SoFi’s roots trace back to a loan pilot project devised by a group of Stanford business school graduates, wherein alumni would offer loans to low-risk students. Since 2011, the San Francisco-based firm has expanded to employ more than 1,000 people, and posted $547 million in revenue in 2017.

Korn Ferry and SoFi previously worked together on KF Advance, which expanded career development offerings to SoFi’s 600,000 members. The platform delivers online assessment, resume review, career coaching, and other services drawing on Korn Ferry’s extensive expertise in the area.