LOS ANGELES -
- Labor Market Data Rated Most Accurate Economic Indicator; Majority of Executives Feel Labor Recovery Will Lag Equity Markets
The most recent Executive Quiz results released today by The Korn/Ferry Institute reveal a significant improvement in the overall attitude of global executives about the direction of the economy, but lingering anxiety about labor markets. According to the survey, a substantially higher percentage of executives feel the economy is in recovery. However, the majority of executives say the labor market will lag the financial markets in regaining strength. Global executives rank labor market data as the most accurate economic indicator.
When asked what best describes the global economy, 40 percent of executives responded “recovering” compared with just 13 percent in March - a 67.5 percent increase in just six months. An overwhelming majority, 71 percent, felt that stock performance would continue to improve through the second half of 2009 as well.
Still, the majority of executives (60 percent) describe the overall economic state negatively, with 39 percent categorizing it as a “severe recession” and four percent calling it a “depression.” However, these numbers are significantly lower than March data, when “severe recession” accounted for two-thirds of responses and “depression” tallied six percent.
Global executives ranked “labor market data” the most accurate economic indicator (42 percent), followed by “consumer attitude and opinion surveys,” “manufacturing data” and “retail data” (tied at 13 percent) and “stock market data” (11 percent). “Inflation” and “housing data” earned five and four percent of the responses respectively.
The prospects for a labor market recovery seem to lag the financial markets. Nearly three-quarters (73 percent) say we have yet to reach the bottom of the labor market. Twenty-nine percent say the trough will come in Q4 2009, 37 percent believe sometime in 2010 and seven percent believe it will be after 2010. Just 27 percent feel that we have already or are currently experiencing the bottom of labor demand.
“We often find that labor demand lags financial markets when coming out of a recession,” said Charles Tseng, president, Asia Pacific, Korn/Ferry International. “Companies hire from the top down, so we see senior executive positions filled early while companies are looking to attract and retain the best leadership to emerge from the recession, then hire managers and staff in the months and quarters that follow. But cautious hiring is an indicator of economic recovery. We should expect slow and steady improvement in the labor markets, not the rapid upswing like we have seen in the financial markets.”
Methodology
The Korn/Ferry International Executive Quiz is based on a global survey of executives registered within the firm’s online Executive Center, ekornferry.com. Respondents from 70 countries, representing a wide spectrum of industries and functional areas, participated in the most recent Executive Quiz in July-August 2009.
About The Korn/Ferry Institute
The Korn/Ferry Institute was founded to serve as a premier global voice on a range of talent management and leadership issues. The Institute commissions, originates and publishes groundbreaking research utilizing Korn/Ferry’s unparalleled expertise in executive recruitment and talent development combined with its preeminent behavioral research library. The Institute is dedicated to improving the state of global human capital for businesses of all sizes around the world.
About Korn/Ferry International
Korn/Ferry International, with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to attract, develop, retain and sustain their talent. Visit www.kornferry.com for more information on the Korn/Ferry International family of companies, and www.kornferryinstitute.com for thought leadership, intellectual property and research.
Source: Korn/Ferry International
Asia Pacific, Shireen Nisha, + 65-6231-6123, shireen.nisha at kornferry.com, or EMEA, Juerg-Herbert Baertschi, +44-20-7312-3178, juerg-herbert.baertschi at kornferry.com, or Latin America, Lindsey Koh, +1-310-556-8532, lindsey.koh at kornferry.com, all of Korn/Ferry International; or North America, Kevin Oates, +1-310-584-8331, kevin.oates at ketchum.com, for Korn/Ferry International
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