Credit Management Association

Opt-Ed in LA Business Journal
By MIKE MITCHELL and RICHARD HASTINGS

As the small business center of California, Los Angeles drives the largest economy in the United States.
The economic engine in our region is remarkably deep and wide – high-end restaurants, hotels and garages, gift shopsand grocery chains, small and medium manufacturers and retailers, and a virtual catalog of other enterprises – and it all depends on a system of business-to-business credit that is absolutely vital.

Elected officials and policy makers in Washington are ignoring that system of credit. Leaders in Sacramento don’t even talk about it. Until their focus shifts to business-to-business credit, our economy will not heal.

The L.A. economic system, much like the rest of the American economic system, is based on a strong and resilient foundation of faith and trust between free merchants who engage in unsecured business-to-business credit, otherwise known as trade credit. This credit moves goods and services, and it relies on trust that invoices will be paid after a brief period of time – a period that we call credit. Credit derives from the Latin word for trust and when that trust is broken, the entire system suffers unfortunate consequences.

Unlike consumer credit, business-to-business credit paves the roads under the trucks that carry the goods from the Port of Los Angeles to farms, factories, distribution centers, retail stores and small businesses.

When Joe Smith makes tables, he purchases raw wood. Joe buys that wood on credit from the wood supplier. He gets about a month to pay for it. No special security is required, unlike the mortgage on your house, secured by the property on which you live. Joe enters into purchase order agreements with retailers who want to buy his furniture on unsecured credit terms; typically, they pay Joe at least a month after he ships them the furniture. He trusts he will get paid. He has to get paid, or his wood supplier won’t get paid and may not get new orders from Joe if Joe’s customers do not pay him.

Joe’s tables are important. His employees earn their wages making his tables, the truck drivers who deliver his products to retailers depend upon Joe and the retailers make their profit only when they sell Joe’s tables. All those jobs feed the economy so families can purchase tables or chairs or countless other products. This is a beautiful, complete circular flow of commerce, but if one component breaks down, the entire flow can break down, leading to lower wages, lost jobs and a weak economy.

You get the picture. Business-to-business credit literally creates the kitchen table around which families sit each month to pay their bills and figure out what they’ll spend. However overworked the image may be, the American economy rises and falls around that table.

We applaud lawmakers and policy makers in Washington and New York for taking steps to improve the banking and regulatory systems. We sincerely hope that leaders in Sacramento can overcome their legendary bickering and devise a rational, compassionate way out of the mess that is our state budget. At the same time, we offer a stern warning. Until and unless overall trust is restored (and liquidity is a function of trust), no matter what policy makers do, the economy will continue to lag and the recovery will take that much longer.

Treasury Secretary Timothy Geithner has said that “credit is the oxygen of the economy.” We agree, if he meant the entire credit system and not just secured bank lending or consumer credit. Geithner and other policymakers must understand the critical role of business credit in any normal economic recovery.

The focus in Washington has to shift away from only pouring money into banks and brokerage houses. We need Sacramento leadership to shift away from programs that put great stress on painful cuts and none at all on progress. The focus needs to shift to Joe, and that includes a forceful call for national policies that focus on the restoration of business-to business credit. That will revive the economy in our region. As Southern California goes, so goes the state. As California,one of the largest economies in the world, goes, so goes the nation.

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MENLO PARK, CA — A recent survey suggests the majority of professionals believe their employers are rising to the occasion when it comes to responding to the downturn. Nearly seven in 10 (69 percent) workers interviewed said their companies are taking appropriate steps to weather current economic conditions. Additionally, more than half (55 percent) feel their employers will emerge from the recession stronger than before. Still, there is room for improvement: Three out of 10 respondents (30 percent) said their companies are doing only some things or nothing right.

The survey was developed by Robert Half International, the world’s first and largest staffing services firm specializing in accounting and finance. It was conducted by an independent research firm and is based on telephone interviews with 457 workers 18 years of age or older and employed in an office environment.

Workers were asked, “In your opinion, do you believe your company is taking the right steps to weather the recession? Would you say your company is …?” Their responses:

Workers also were asked, “Do you think your company will emerge from the recession stronger or weaker than it was going into the downturn?” Their responses:

“Many employers have stepped up communication efforts to help employees understand the challenging circumstances the business faces and the basis for difficult decisions that are made,” said Max Messmer, chairman and CEO of Robert Half International and author of Human Resources Kit For Dummies®, 2nd Edition (John Wiley & Sons, Inc.). “Sharing pertinent information can prevent rumors and speculation.”

Messmer added, “Letting employees know how the company plans to persevere and grow also builds confidence. Professionals who feel positive about their firm’s prospects are more apt to stay on board for the long term.”

Robert Half International has more than 360 staffing locations worldwide and offers online job search services at www.rhi.com.

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Survey Finds East South Central and West South Central Regions Most Optimistic About Financial Hiring

MENLO PARK, CA — Employers are expected to remain cautious about adding accounting and finance professionals in the third quarter, according to the Robert Half International Financial Hiring Index. Five percent of chief financial officers (CFOs) expect to hire full-time employees during the third quarter while 8 percent anticipate personnel reductions. The majority of respondents (85 percent) say they plan to maintain their current staff levels.

The Robert Half International Financial Hiring Index is based on telephone interviews with more than 1,400 CFOs across the United States. It was conducted by an independent research firm and developed by Robert Half International, the world’s first and largest staffing services firm specializing in accounting and finance. Robert Half has been tracking financial hiring activity in the United States since 1992.

“Many companies remain hesitant to commit to adding staff until they are certain of an economic recovery,” said Max Messmer, chairman and CEO of Robert Half International. “In the meantime, most firms are working with their current teams to manage key initiatives, with some employers also bringing in project professionals to assist with rising workloads and support full-time personnel.”

Financial executives continue to report difficulty finding highly skilled professionals for certain functional areas. Twenty-six percent of CFOs said accounting positions, such as senior and staff accountant posts, are the most difficult to fill. Twenty-three percent said they experience the greatest challenges when hiring for audit roles.

Accounting and Finance Hiring — By Region 
While the overall outlook remains conservative, the highest degree of optimism was expressed by executives in the East South Central and West South Central states. A net 2 percent of CFOs in each region anticipate adding full-time accounting and finance professionals in the third quarter.“Growth among the healthcare and hospitality sectors in some areas within the East South Central states is boosting hiring activity in the region,” Messmer noted. “In the West South Central, employers seek mid-career professionals who have a proven work history and are flexible and skilled enough to manage a range of accounting projects.”

Robert Half commissioned additional interviews with CFOs in more than 40 major metropolitan areas to provide snapshots of financial hiring trends in these markets. The local results are available at www.roberthalffinance.com/PressRoom.

Accounting and Finance Hiring — By Industry 
In nearly every industry, CFOs surveyed said they expect to maintain current staffing levels.About the Robert Half International Financial Hiring Index
First published in 1992, the Robert Half International Financial Hiring Index was conducted by an independent research firm and is based on more than 1,400 telephone interviews with CFOs from a random sample of U.S. companies with 20 or more employees. For the study to be statistically representative and ensure that businesses from all segments were represented, the sample was stratified by geographic region and employee size. The results were then weighted to reflect the proper proportions of employee size within each region.

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MENLO PARK, CA — Difficult economic conditions have had a substantial impact on accounting and finance departments around the globe, according to a new survey of finance and human resources managers. Respondents reported that economic conditions have contributed to heavier workloads, higher stress levels and lower morale. The study also found that firms are adapting their management strategies to maintain productivity and alleviate the burden on their employees.

The global survey was developed by Robert Half International for the company’s third annualRobert Half Global Financial Employment Monitor and conducted by an independent research firm. The study, focusing on hiring difficulties, retention concerns and other staffing-related issues, is based on a survey of more than 4,800 hiring managers in finance and human resources across 21 countries. This year, the report also examined the effects of the global economic downturn on financial teams around the world.

Employers Addressing Economy’s Impact on Workers
In the report, 32 percent of U.S. respondents, compared to 40 percent globally, stated that their finance and accounting departments had been affected by the downturn. Among that group, 49 percent of U.S. respondents have a hiring freeze in place, 47 percent have consolidated roles and38 percent have experienced layoffs. Executives from Hong Kong and France (60 percent in each country), and Brazil (56 percent) reported the highest levels of personnel change.

Asked how current economic conditions have affected their individual employees, nearly half (48 percent) of U.S. respondents cited increased stress, compared to 39 percent globally. Managers surveyed from Australia and Ireland, along with those from the United States, reported the highest levels of stress among their financial teams (48 percent). The next most commonly cited effects, both globally and in the United States, were heavier workloads and decreased morale. Less than one-third of all respondents both in the United States (32 percent) and around the world (29 percent) said their accounting and finance teams have remained unaffected.

In response to the economic downturn and its impact on their employees, the majority of managers surveyed (62 percent in the United States and 70 percent globally) said they have taken some form of action to better support their teams. The most common measures employers worldwide are taking include redistributing workloads, increasing communication with staff and postponing projects. Increased communication was a particularly notable trend among firms in Ireland and Singapore, where nearly half (46 percent) of managers surveyed from each country cited this as a best practice.

“Leaner teams mean that everyone is doing more work with fewer resources, which ultimately produces diminishing returns,” said Max Messmer, chairman and CEO of Robert Half International. “As a result, managers are rebalancing assignments in an effort to prevent overwork and ensure team members are focused on the most critical projects.”

Recruiting and Retention Concerns Persist
Despite slowing economic conditions, most managers (56 percent ) worldwide said they were still having difficulty finding skilled job candidates for accounting and finance positions, the same percentage as in last year’s survey. Recruiting challenges have eased the most in the United States, where only 32 percent reported difficulty locating good people, down from 72 percent last year. Countries having the hardest time finding skilled workers are Hong Kong (87 percent), Brazil (79 percent) and Japan (73 percent).

Even in countries where recruiting is easier, retention worries remain. In the United States,
40 percent of respondents reported concerns about losing key staff to other job opportunities in the next year, compared to the global average of 53 percent. In New Zealand, less than half of the managers surveyed (46 percent) reported difficulty finding skilled job candidates, but two-thirds (67 percent) expressed concern about losing their top performers in the next year. Significant levels of concern over potential staff turnover also were cited by managers in Hong Kong (89 percent), Spain (87 percent) and Singapore (82 percent).

Messmer added, “Even in a downturn, companies make holding on to their top performers a priority. They cannot afford to lose good accounting and finance employees without also experiencing productivity and performance losses.”

About the Survey
The international study was developed by Robert Half International, the world’s first and largest staffing services firm, for its third annual Global Financial Employment Monitor and conducted by an independent research firm. The report examines current financial employment trends around the world and the impact of the economy on accounting and finance departments.

The survey includes responses from more than 4,800 human resources and finance managers in 21 countries across Asia, Australia, Europe, North America and South America. The overall margin of error is +/- 1.3 percent, and the results are within 95 percent certainty. Comprehensive survey findings are available at www.roberthalf.com/PressRoom.

About Robert Half International
Founded in 1948, Robert
Half International is the world’s first and largest specialized staffing firm and is traded on the New York Stock Exchange. Its financial staffing divisions include Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources, for temporary, full-time and senior-level project professionals, respectively. The company has more than 360 staffing locations worldwide and offers online job search services on its divisional websites, all of which can be accessed at www.rhi.com.

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MENLO PARK, CA — A net 2 percent of chief financial officers (CFOs) interviewed for the Robert Half International Financial Hiring Index predict decreases in accounting and finance personnel in the second quarter of 2009, with most (86 percent) executives reporting a desire to maintain current staff levels for the next three months. Five percent of respondents indicated they plan to add full-time employees while 7 percent expect staff reductions. 

The Robert Half International Financial Hiring Index is based on telephone interviews with more than 1,400 CFOs across the United States. It was conducted by an independent research firm and developed by Robert Half International, the world’s first and largest staffing services firm specializing in accounting and finance. Robert Half has been tracking financial hiring activity since 1992.

“Businesses are increasingly reluctant to hire in the current environment, choosing instead to maintain staff levels until they see definitive signs of an improving economy,” said Max Messmer, chairman and CEO of Robert Half International. “Companies that are hiring are more selective because they can be — there is a larger pool of skilled applicants available. As a result, employers are taking extra time to identify and hire the best available person for each open position.”

Even with higher unemployment rates, however, some financial executives continue to report difficulty finding highly skilled professionals for certain functional areas. Twenty-five percent of CFOs interviewed cited accounting positions as the most difficult to fill, and 19 percent said they experience the greatest challenges when hiring for finance roles.

Accounting and Finance Hiring — By Region
CFOs in the West South Central states expect the most hiring activity in the second quarter. A net4 percent of CFOs in the region project additional hiring of full-time accounting and finance staff.Eleven percent of executives plan to add employees while 7 percent forecast personnel reductions.

“A diverse industry base, including sectors such as oil and gas that remain steady, has helped the West South Central weather some of the economic turmoil and maintain pockets of growth,” Messmer said. “Companies need mid-level general accountants, controllers and senior audit managers, and they place a particular priority on professionals able to assist in multiple areas.”

Robert Half commissioned additional interviews with CFOs in more than 40 major metropolitan areas to provide snapshots of financial hiring trends in these markets. The local results are available at www.roberthalf.com/PressRoom.

Accounting and Finance Hiring — By Industry
Among industries, 6 percent of professional services CFOs expect to increase hiring in the second quarter and 4 percent plan a decrease, a net 2 percent increase. A net 2 percent of CFOs in the finance, insurance and real estate sector also said they will expand their staff levels.

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