CFOs Will Start Hiring -- When Results Surge

22.04.2011
A suggests that they are waiting for proof of a solid economic turnaround -- in the results in their own companies -- before committing to major hiring.

The good news in the latest of Deloitte's "CFO Signals," a quarterly report that Deloitte has been producing for a year now, is that financial executives' optimism seems to be sharply increasing. And this, of course, both reflects their reading of the economy, and augurs well for economic progress continuing to be made via additional positive corporate growth decisions.

But the most surprising finding is the high corporate bar that the CFOs are setting to measure the improvement needed to become major job creators again. Indeed, most of the executives questioned said that it would take a 20% revenue gain before they would boost domestic hiring substantially.

"We were shocked by that also," says Greg Dickinson, who leads the Deloitte Signals survey. His reading of the situation is that after the constriction of recent years, finance executives "think there's unused capacity in the organization, so they can grow quite a bit without hiring."

Projections for year-to-year domestic hiring growth among the large North American companies represented in the survey -- 75% of respondents were from firms with more than $1 billion in annual revenues -- stayed at the low 1.8% that Deloitte had seen for the past three quarters. Responses also showed that a 5% upturn in revenue would have little or no affect on hiring for seven of 10 of the companies queried. A 10% revenue rise would lead to substantial hiring moves among only 11% of the companies. (Get a link to the entire survey .)