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Workplace Solutions

Execs play it safe in uncertain times

Thu, 03 Nov 2011 11:36

Although the economy is gaining strength, business remains sceptical and this mismatch is leading to a reappraisal of companies’ workplace strategies. As a result, Regus has seen a surge in enquiries about the greater workplace flexibility it provides – prompting it to open more business centres in South Africa, the latest at Umhlanga Ridge New Town Centre in Durban.

Regus’ recent Business Confidence Index and economic growth forecasts underline the contradictions between the country’s cautiously optimistic authorities and CEOs who don’t trust the upturn.

In Regus’ last six-monthly report, published in October and covering more than 12 000 executives and business owners from 85 countries, South Africa’s optimism slipped 17 points to 115 since April 2011 compared to a global dip of 11 points to 114.

Yet in August the International Monetary Fund forecast South African economic growth of 4.0% in 2011, rising to 4.2% in 2012. A recent South African Reserve Bank projection was 3.7% growth in 2011 – above National Treasury’s February Budget forecast of a 3.4% uptick but all still showing an economy slowly gaining strength.

“Years ago, such positive projections would have encouraged strong commitment to expansion and investment in more extensive office infrastructure,” said Joanne Bushell, Regus CEO of Middle East and Africa. “Today, business seeks growth but demands flexibility. In all major centres – Johannesburg, Cape Town and Durban – cost-sensitive companies are keen to avoid permanent additions to their overheads until they see the economy gather traction.”

By adopting prudent strategies local companies are ensuring they can still grow despite uncertainty. “The shift to new ways of working is significant as many companies in South Africa tend to be conservative in outlook and have traditionally favoured traditional office leases or outright office ownership,” added Bushell.

Local businesses are following in the footsteps of multinationals and major companies with international links represented in the Regus customer-mix – businesses that are close to the international trend to greater workplace flexibility.

Bushell said: “Our strongest selling proposition is ‘grow as your business grows’ with the understanding that you can also downscale if growth goes on hold for awhile. This strikes a chord with prudent business strategists in an uncertain market.”