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2012 Business Forecast

by Danielle Burrows
Europe’s debt crisis, potential Congressional gridlocks and the upcoming presidential election all threaten to throw a wrench into 2012’s business forecast. Even without consideration of these wild cards, though, most agree the local business landscape still thirsts for reawakening. So what are South Jersey’s business minds planning to do to get back on the right track?

“Growth has been relatively anemic and we have not been able to recapture the pre-recession atmosphere,” explains Dr. Robert Ferrari, professor of economics at Rowan University.

That said, a warm front is moving in—albeit at a glacier’s speed.

“In 2012, the real GDP is expected to grow 2 percent to 2.5 percent. New Jersey’s unemployment should drop from its current 9.1 percent rate to the mid-8s,” Ferrari says. New technology is infiltrating South Jersey business operations and marketing.

Simultaneously, companies are working to undo a recession-induced lack of bench strength—all while maintaining a sense of necessary caution. This combination of forward movement (particularly in targeted marketing and key leadership) and precautionary creativity make for a mixed bag of business trends to watch for in 2012.

A Surge in Recruitment Activity

It’s no secret that most companies have either reduced head count or held tenuously onto pre-recession workforce sizes since the economy spiraled downward in 2008.

“This is the case across the board, from Fortune 100 companies to small- and mid-sized businesses,” explains Brian Clapp, chief operating officer for Career Concepts, Inc., a human capital consulting firm with offices in Marlton.

Yet as headcount stagnates, recruitment is on the rise—a trend that, while initially baffling, stems from a shift in priorities and spending.

“We are seeing a unique phenomenon right now where demand is up across the board, meaning companies are downsizing while simultaneously looking for talent,” Clapp observes. “They’re not looking for lots of people; they’re looking for specific people.

People are losing jobs while there are wanted ads in the paper for the same company, but for other roles.”

Targeted attempts to strengthen and develop existing leadership results in a cut in overall training budgets but a boom in front-line supervisory training.

“Coaching and leadership development are growth areas right now because employers are realizing that the lack of investment over the past few years has left them with leaders at all levels ill-prepared to lead and poor employee engagement,” Clapp says.

This reallocation of priorities and spending spells an uptick in passive hiring—or the solicitation of job candidates who are already gainfully employed elsewhere.

“Passive hiring is, I think, one of the primary reasons companies reach out to search firms,” says William Emerson, president of Emerson Personnel Group in Cherry Hill.

“The perception of passive candidates, whether accurate or not, is that they’re more favorable than traditional candidates because they’re not actively looking for work.”

A simple lack of manpower adds to businesses’ likelihoods of outsourcing hiring.

“Most companies are still spread pretty thin, and don’t have the capacity to handle the overwhelming number of responses they receive in response to job openings,” Emerson says. “Not only is there an overwhelming response, but the majority of candidates are not qualified. Companies are investing in search firms because they already have a sense of qualified candidates, can screen out unqualified candidates, and can make it happen more quickly.”

While this trend is a double-edged sword for job seekers and the currently employed, it’s a promising sign of economic conditions.

“Our industry is often a leading indicator of when things are turning for the worse, as well as the opposite—when things are getting better,” Emerson says. “In 2011—particularly in the second half—we started to see more consistent requests for direct hiring services, which could spell optimism for the economy as a whole.”

The Reviews Are In

Google notoriously plays things close to the vest where its algorithms are concerned. But those with a close eye on the search engine dynamo’s patterns speculate a recent addition has been made to the factors that determine result rankings: user ratings and reviews.

“Sites like Google Places and Yelp are designed to let users weigh in. We’re seeing search engines beginning to use these results,” says Steve Kurtz, owner of Sewell Internet, a full-service Internet marketing firm in Turnersville.

Google, he says, stood up and took notice when Facebook’s “like” button arrived on the scene.

“Google didn’t go ask Bing or Facebook for its user ratings; instead, they made Google+ and Google Places,” Kurtz says. “Google+ is equipped with browser add-ons that let searchers ‘vote’ for their favorite sites. I think it’s safe to say Google is already incorporating user feedback into their search results.”

The incorporation of user feedback into page results puts pressure on small- and medium-sized businesses already struggling for coveted visibility. Kurtz suggests they tackle user reviews with the same customer service awareness they’d use for in-person situations.

“There are going to be bad reviews,” Kurtz says of review sites. “There’s nothing that can be done to prevent them. Make good with a negative reviewer, and maybe even ask a dissatisfied customer, once you’ve made good, to remove the review or amend it with an update.”

Business owners should also maximize all Web presences. Google Places automatically sets up pages for all businesses—but it’s up to that business to optimize the page and assure its accuracy. Images, YouTube videos and a description up to 200 words can all be added to a Google Places listing.

“As a general rule across sites, the best thing a business owner can do is participate,” Kurtz says. “Encourage people to interact with you, and you do that by engaging them.

Give people things that are interesting, and so interesting they want to share. If you can do that, it’s almost an automatic you’re going to get more ‘likes.’ Read reviews and respond. If you got a bad one, figure out what happened and try to respond and, even better, remedy.”

Increased Cloud Cover

Cloud computing, despite emerging as a buzzword in the past 24 months, still requires an explanation for many people. George Mach, CEO of Apex IT Group, is the man for the job.

“Cloud computing is when you take computer equipment and apps that live in your building and put them in someone else’s building, where they’re managed and maintained.”

Benefits of moving from a hard drive or local server to an outsourced one include reduced electricity costs, fewer space requirements, and greatly reduced management.

“The cloud provider becomes entirely responsible for managing lifecycle. There are no capital expenses anymore; just operating expenses.”

With an increasing number of startups moving immediately into the cloud, Mach is also seeing a shift among both small and large companies.

“It’s easier for small companies to go into the cloud than it is for a larger company. For a 10-user network, moving to the cloud can be done in a fraction of the time it’d take to move 50 employees. In terms of business benefits and savings, though, it’s much better for a larger organization.”

Full cloud services can run anywhere from $175 to $250 per network user, per month. But, the decision to transition to the cloud is not all or nothing.

“It’s like an a la carte menu,” Mach says. “Depending on your needs and budget, you relocate certain services, like spam service or e-mail.”

Mach says 2012 will see an increase in e-mail being relocated to the cloud, as well as the burgeoning popularity of virtual desktops—projected to be a $53 billion industry by 2013. XenDesktop, an example of a virtual desktop, allows you to stream applications onto a desktop.

“It’s like a virtual container. You click the icon, and it launches another desktop within a desktop. It looks like you’re working off your hard drive as usual, but you’re actually in the cloud.”

Virtual desktops can be repaired—you guessed it—virtually.

“Currently, if you’re working on a laptop and it breaks, a tech comes into the facility to fix it. If it’s virtually broken, though, a tech can go back to the point in time in the cloud offering.”

Still confused? Mach uses online banking as an example of being in the cloud.

“Most consumers have been in the cloud for years, but don’t match that term with those experiences.”

Cracking the QR Code

“QR codes hit their tipping point in 2011. You can’t go anywhere now without seeing them.”

Adam Sokoloff, owner and president of Sunrise Signs in Gloucester City, is referring to the pixilated symbols that became ubiquitous in marketing and advertising during the past 12 months, with Mobio Identity Systems reporting a usage increase of 4,549 percent in the first quarter of 2011 alone. Today, the (usually) square barcode variations adorn everything from movie posters to potted plants.

From a consumer standpoint, QR codes are simple: Users download a smart phone QR reader application that, when pointed at the matrix barcode, directs the phone’s browser to a designated URL landing page.

Optimizing them, on the other hand, has proven to be more difficult for marketers.

“I can’t begin to tell you how often I see bad implementation of QR codes, where there’s no good call of action, or they take a user to a landing page that’s not mobile-optimized,” Sokoloff says.

As the owner of a custom wrap and graphic company that offers QR coding as a value-added service on all their products, he sees first hand the learning curve that’s accompanying QR codes’ introduction to the United States.

“You’ve got to have a call to action,” Sokoloff says, pointing to sweepstakes, giveaways, and offers to download eBooks as solid examples. “For a consumer or prospective consumer to take the time to scan the code, just taking that person to a homepage is a missed opportunity.”

He points to the minimal cost as a reason why marketers shouldn’t give up on QR codes, even if rates of return haven’t broken into the black yet.

“QR codes are very easy and relatively inexpensive to set up, and their results are easily tracked. That said, you have to have a good idea and give someone reason to scan. I think 2012 will see better and more creative QR code implementation.”

Organizing Internal Sales

Since launching in 1998, Marlton-based National Employee Management Resources—a professional employee organization (PEO) that serves as an outsourced human resources department—reaped all the benefits of a bull market.

“Everything had been grand and growing for years,” explains company president and CEO Janis Sweeney. “When we signed a client, they may have had 10 employees on board, and the next day they seemingly had 11. Our business consisted largely of growth-oriented services.”

And then the recession hit.

“Clients began downsizing. We offered exit interviews to laid off employees; we revamped their resumes; we taught them how to apply for unemployment and trained them for forthcoming job interviews,” Sweeney says.

And that’s where Sweeney’s other company, National Worksite Staffing, also in Marlton, came into play.

“The companies operate under different Federal ID numbers; there hadn’t previously been a need for them to co-mingle. But as our clients laid off staff, we were able to help those people by offering to hire them as temps through National Worksite Staffing.”

The two soon became interdependent. To encourage this mutually beneficial relationship, Sweeney, like many company owners, offers incentives and basic sales training to non-sales staff.

“If National Employee Management Resources has a client that becomes interested in National Worksite Staffing, and it results in a deal, that person gets a referral bonus. We now hold staff meetings together—everyone from both companies in the same room, sharing successes and challenges.”

Sweeney realizes the fortuitousness of owning two complementary companies, but insists the larger lesson exists beyond this example.

“In most companies, there are opportunities for cross-selling products and services. An increasing number of companies are having more employees do that internally, selling inside.”

Even more, dispersing sales responsibility decreases the chances of layoffs by almost inevitably bolstering profit.

“When companies weren’t struggling as much with the downturned economy, they had those other dollars because they weren’t scrutinizing expenses so thoroughly. There was the money to hire someone whose sole responsibility was sales. By asking employees to absorb some of that cost burden by chipping in, organizations are increasing the odds of producing business and volume.”

Amid the uncertainty, this diverse list of trends can help lead to recovery if tackled wisely. The use of growing technology and new hiring practices could be what is necessary to help push South Jersey businesses ahead of the curve, leading to more jobs, higher profit and a more stable future.

Published (and copyrighted) in South Jersey Biz, Volume 2, Issue 1 (January, 2012).
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