Factors that drive employment growth

Globally revenue and profit growth were found to be roughly aligned with 50% of companies reporting a revenue increase and 41% declaring that profits were on the rise according to the Regus Business Confidence Index. This is an important indication that rates of growth are sustainable and therefore that the recovery is overall strong enough to result in improved profitability for more and more businesses if they are able to ‘read’ the global market and react accordingly.

China and India continue their course of remarkably fast growth with the former in the lead. An enormous 72% of Chinese businesses reported a rise in revenues in the past year and 62% noted increase in profits. In India, 67% companies recording revenues rising was matched by 60% of firms where profits rose, indicating that these emerging economies are harnessing growth while containing overheads.

In spite of less satisfying results than large businesses on the profit and revenue growth front, small businesses are keener to invest in sales and marketing than large businesses. 41% of small companies plan to divert more budget to sales, and 39% to marketing, in the coming year compared to 36% and 23% of large businesses, once again giving proof of that entrepreneurial spirit that characterises smaller firms.

Larger businesses (25%) are instead a little more likely than smaller firms (20%) to invest extra budget into product management and development, highlighting that they are willing to take on long-term investments in equipment and R&D which smaller businesses may have difficulties in funding after a long downturn and in light of the difficult business lending conditions experiences by this segment globally.

With profits and revenues rising across the board, it is not surprising to find that global business optimism has reached a peak since the bleak conditions of late 2009. As a result of this optimistic mindset, companies are reconsidering their investment strategies and deciding to channel budget into different areas that they judge will help them catch the wave of economic recovery.

In particular, businesses are keen to invest more in sales and marketing departments, upon whose skills and activities they will rely to take full advantage of economic recovery. Firms globally also revealed the intention to invest in the development and management of new products revealing that where capital is available or loans are achievable, there is the expectation that benefits will be long-term.

Savvy businesses have taken from the downturn an important lesson of agility and are making use of the more flexible workspace arrangements on the market.

Methodology
Over 17,000 business respondents from the Regus global contacts database were interviewed during February 2011. 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 plans for investment in various departments. The survey was managed and administered by the independent organisation, MarketingUK.