Finance heavyweights share lessons from the downturn

23 August 2009

HONG KONG, 24 August 2009 – When ten finance chiefs from leading global and local corporations sat down to discuss lessons learned from the recent economic recession, all agreed that the most valuable realisation was that the finance function needed to make a swift move from focusing on the back office to being involved in the frontline.

Hosted by Robert Half, the roundtable brought together heads of finance from a range of industries including property, automotive, electronics, retail and fast-moving consumer goods.

The overriding themes that arose from the discussion weren’t necessarily only about number crunching. The participants expected the most successful financial strategies post downturn to be focused on staffing and recruitment, integration of financial operations throughout all levels of a corporation and the importance of disciplines such as marketing and sales.  The roundtable also explored what’s on the horizon for post-recession Hong Kong.

Recruiting was a big theme with most agreeing that a recession should not necessarily halt hiring for firms seeking growth post downturn. Andrew Morris, Director of Robert Half Hong Kong also commented on this point, noting that the best people in a recessionary market are those still with jobs.  An interesting trend reported by a few of the participants was the notion that they are  building their collective experience of doing business in China by encouraging Hong Kong natives who have been living and working on the mainland to return to the SAR. “Smart managers will always be on the lookout for candidates who can help to improve their business. Most strategic positions are very often exempted from corporate headcount freezes,” added Karl Davies, Finance Vice President of Avery Dennison’s Retail Information Services in Asia.

All participants agreed that an interesting outcome of the economic situation has been the number of temporary and contract roles currently available in the market.  “Temporary and contract employment is a strong solution to maintaining employees’ satisfaction and a positive corporate culture with a company rather than successive hiring and firing,” explained David Jones, Managing Director – Asia Pacific, Robert Half International.  “Before, many people in Hong Kong would not consider a temporary position, but now it seems that professionals would rather start as a temporary hire at a great company than as a permanent hire in a company that they would have not normally considered before the recession.”

Many of the participants noted that quick and fast corporate growth as seen in Asia in recent years can often lead to massive financial inefficiencies that don’t come to light until a recession. A chance for company reorganisation, restructuring and systems analysis has only taken place since the slowdown which is why Asian companies have not held back on implementing processes and capital expenditure projects where long term they present cost savings.

At Swire Beverages, for example, the company focus on cost saving by looking for innovation in order to cut the costs of packaging and production, explained William Yiu, Finance Director of the company.  Kenneth Ho, Chief Financial Officer of Swatch Group also reiterated this point with his company’s strategic direction to pursue retail expansion and open up new flagship stores in Tsim Sha Tsui and Causeway Bay, allowing the company to reach out to customers more efficiently and strengthen its brand equity.

Edmund Lee, Partner at PricewaterhouseCoopers also pointed out a similar trend he’s noticed among many of his multinational clients. “Many companies we work with, particularly US ones, are rethinking the controls they have in place,” he explained.  “A recession is a distinct call-to-action in regards to re-evaluating time-honoured processes.”

This trend has also been especially true at Volkswagen, noted Keith Chan, the company’s Hong Kong Finance Director. “The downturn is really the time you can see the most effective use of marketing spend. Finance, sales and marketing need to  be able to work together and evaluate their resources and decide on the most effective way to put them together to maximise market share.”

All participants reiterated that the role of the CFO has become higher profile within an organisation and is receiving more attention from the board and the CEO since the downturn. A key conclusion was also that senior finance personnel have a responsibility to understand the frontline business operations so they can ensure that cost efficiencies are in place. They also need to train and support staff at every level and department within the organisation in order to ensure that everyone is educated about financial accountability.

The importance of loyalty and staff retention was a theme that echoed strongly throughout the discussions.  “You can’t assume your employees are loyal when you’re in a recession,” pointed out Chew Fook Aun, Chief Financial Officer of Esprit Holdings.  “It’s only natural that when the economy begins to pick up again, attrition rates are going to increase and corporations need to prepare for that.”

What insights can be gleaned for this market?  All participants agreed that engaging employees takes a lot more than a high salary in this new business era, and needs to be tailored to the individual’s goals and values.  “Fuel employees’ passion, help grow their jobs into promising careers, and build succession plans,” noted Karl Davies, Vice President of Finance, Retail Information Services Asia, Avery Dennison. “That in itself will help to sustain retention, and is fundamental to having a steady pipeline of promising talents in the organisation.”

A common theme was the agreement that the Hong Kong market is especially transient, and that as the city starts to move into its post-recessionary stage, important measures have to be taken.  Jon Kennedy, Chief Financial Officer of PPG, for example, emphasised the value of strongly implementing retention strategies before the market comes back. “It’s important to identify and select the top 25% of employees most critical to your company and recognise and reward their achievements,” he explained. 

All participants agreed that the recession has been an awakening for Generation Y employees who have become more realistic in their career expectations and more flexible in their demands. Participants also noted that the next generation of employees are being much more conservative about their career options and are focusing on traditional professions such as law and banking and are not opting to pursue disciplines that are now seen as unstable such as investment banking and fund management.

Robert Li, Chief Financial Officer of Hallmark concluded: “There has been a philosophical change in the average employees’ outlook. The recession has caused people to re-evaluate their career options and strategies, and it’s no longer only about salary but about stability, career promise and a company’s profitability.”

Participants in the 2009 Robert Half Roundtable discussion included:

  • David Jones, Managing Director – Asia Pacific, Robert Half
  • Andrew Morris, Director, Robert Half Hong Kong
  • Chew Fook Aun, Chief Financial Officer, Esprit Holdings
  • Jon Kennedy, Chief Financial Officer, PPG
  • Edmund Lee, Partner, PricewaterhouseCoopers
  • Robert Li, Chief Financial Officer, Hallmark
  • Kenneth Ho, Chief Financial Officer, Swatch Group
  • William Yiu, Finance Director, Swire Beverages
  • Karl Davies, Vice President of Finance, Retail Information Services Asia, Avery Dennison
  • Keith Chan, Finance Director, Volkswagen Hong Kong

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