Is It Safe To Move Now ? - Part 2

Where can one move now?

Few sectors are evergreen sectors, that have proven to be robust during crisis. People will continue to spend on healthcare, be it medical equipment, drugs or supplements. If at all there is a cut in spending, the last to go would be medical equipment and drugs. World renowned companies such as Pfizer, GSK, Merck will be faced with challenges from generic drug makers and they have to find ways, if they do not have new pipelines, either by acquiring struggling companies or acquiring new product lines. Good news is that Pfizer's board has agreed to acquire Wyeth, pending approval from authorities and GSK has acquired UCB. This shows these majors have strong cashflow and base and are adapting fast to the situation. In Malaysia, private medical care and medical tourism has gained popularity which then, requires new infrastructure, investment in new equipment and systems and skilled talents.

The other sector that will adjust quickly and is always robust is the Energy sector. I reckon that oil majors and utilities will hold back on investing on green plants for now. This is because, the price of oil per barrel does not promise a decent return on investment. During this time, plant owners would increase spending on extension of plants, refurbishment and rehabilitation of existing plants and improvement on operation and maintenance activities. Stuart Dean, the President of GE for S.E.A has in fact concurred on this, in an interview with BFM, in early February. Malaysia has already become global hubs for few multinational companies, for the provision of plant services and engineering. We are now ready to ride on this new opportunity of investments.

Although banking and finance will generally be lukewarm, there is always opportunity within as people would find alternatives to increase the return on investments. Hence, banks will beef up the risk, internal audit and recovery functions. Debt restructuring will also be on the rise. I feel this time people would be wiser, knowing that many international banks are now on life support. Islamic Banking would attract some interest as it is known for its altruistic nature. Malaysia has become the hub for Islamic Finance and Singapore is fast catching up too.

Generally, there would be a great demand for experts in the area of risk and internal audits, as corporate governance will be on the front page of key strategies laid out most listed companies during this time.

CnetG had seen an increase in orders for Finance experts in the last 6 months. Companies will be looking at highly effective cost control techniques, increase operational and financial audits and risk management.

Pulling out a page from the last recession, experienced HR people will be on demand too. HR experts with M&A expertise, or organizational development experts with transformational and capability growth expertise and attraction and retention expertise will be on the rise.

Interestingly, a major oil company had recently adjusted the salaries of its engineering team, and each of them got an average 25% increase in pay! This could be a strategy to retain good people and allay fears of losing jobs, by demonstrating their firm belief on its people.
I am terribly sorry for this long hiatus. My ideas stop flowing thoughts to paper, on certain Sundays although my mind churns out essential points on this topic.

Besides demand in certain industries, few critical jobs will be high in demand too. Companies that are shedding its old, ineffective ways of doing business, will obviously look out for CEOs from the slew of successful companies around the world. Now, don't be absolutely sure that just because a company reports losses in the last 2 quarters, its on a brink of collapse. A well run organization, without government bailouts or unjustified vested interest, should face the natural economic cycles, as an exercise to better itself after each phase.

GE Capital reports a loss of 22% last year, however GE Energy is recruiting up to 800 engineers worldwide, as it expects the Operation and Maintenance sector to speed up. As shared before, most asset owners would now increase spending on O&M, instead of on new plants, to improve output. One of the reasons GE has always emerged stronger after each crisis and mid-crisis is because it sheds its skin from time to time. Non-performing CEOs or captains are booted out immediately and replaced with top talents from within the business or outside the business.

CnetG had also recently placed a Director for Legal and Compliance with a multinational pharmaceutical company which had just acquired a smaller competitor and has appetites for more acquisitions. Naturally, the successful candidate, who hails from another equally large cash rich FMCG company was unusually worried than she was, in August 2008. However, after considering the impact of her new role in the imminent M&As, and Compliance initiatives, she was far more convinced that she has greater prospect in the new organization, than what her current organization has to offer.

Next: Why not stay?

Is It Safe To Move Now - Part 1

As a senior partner of CnetG Asia, a HR Outsourcing firm, and also as Director of its Executive Placements business, I have been proded with this question in the last few weeks. In fact, we went on air on BFM 89.9 ( a new business channel in Malaysia) on this topic last week. Follow this link, if you missed it -

http://www.bfm.my/Is-it-Safe-to-Move-Raj-Kumar-Manish-Mehta-CNetGAsia.html


Unnecessary panic and apprehension can rob you of opportunities that may take you to greater heights in the next few years.

Any move to a new job, has to be thought off carefully, regardless of the economic cycle we are in, whether it's during a boom or during an economic crisis.

We are actually facing a global economic crisis, which was worsened by also the global credit crunch. This couling effect would have a myriad of impact on all sectors, on all countries in every region, on every strata of people and society.

The first crack appeared in August 2007 but it was taken lightly by all countries, thinking it's a domestic financial problem. It was the subprime issue in the U.S. that shocked the whole world and later brought out more worms in the can, with the collapse of strong financial organizations, such as Lehmann and Barclays.

Subsequently, every country started issuing negative reports. I attended several forums in search of facts and figures and the direction of the world economy. I was lucky to be invited to the Khazanah Megatrends 2008, which is the barometer of Malaysian economic and finance outlook for the following year. Reports show that the financial reforms by Bank Negara and the current results show that Malaysia will be cushioned, if not protected by the crisis. Our savings rate is at its highest and the NPL is considered low. An acquaintance of mine, who is a senior HR expert in a oil company said that Bank Negara has warned of a major impact in May and could last for 12-18 months, depending on how the government, GLCs and the private sector respond to it.

World reports from CNN and CNBC have showered some good news. Companies have started adapting to the crisis with a myriad of actions including restructuring, acquisitions, cost cuttings and shockingly, firing of inept CEOs, who were driven by greed, and self-centered policies.

Like dangerous curves on a racetrack, economic downturns create more opportunities for companies to move from the middle of the pack into leadership positions than any other time in business.Unlike straight-aways where leaders can thrive on raw power alone, steep curves require strategic finesse. That often results in dramatic differences in performance as leaders steer out of the curve.

This is the first flash of good news, that now is a better time to move, than before.