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E-mailThough it may be almost twice as easy to attract and keep talented employees as it was a year ago, CEOs report a different story when it comes to attracting and keeping investors and customers in the current economic climate. And while the percentage of business leaders who report that it’s easier to get and keep customers is down dramatically from 2008, the numbers don’t differ much from those in 2005, when the economy was much healthier. “In good times and bad, strong brands do well,” explains Jeffrey Resnick of Opinion Research Corp. “In today’s economy, trust in a brand is critical. It drives the belief that customers will receive the ROI they expect.”
Mead Johnson Nutrition Co. (MJN) President and CEO Stephen Golsby recognizes that it has become a bit more challenging for his company as parents are more focused on price. “At the same time, they want to provide the best for their child,” he says. “Brand loyalty is a major factor that must be created and nurtured in good and bad times through the quality and efficacy of our products and activities.”
Investors are clearly the stakeholders who represent the biggest challenge for CEOs. Fully 64 percent of the CEOs polled say it’s more difficult to attract investors in the current financial climate, more than double the percentage who felt that way just a year ago. Indeed, when Mead Johnson made an initial public offering in February — in the midst of the market’s tumult — Golsby says he knew it would be essential to present potential investors with strong reasons to believe in the company. “Quality brands and products, strong growth and profitability, and favorable global demographics to drive demand for our products make a pretty compelling story,” says the CEO, who adds that the IPO was 14 times oversubscribed.
Keeping shareholders in the fold isn’t much easier. Last year 35 percent of CEOs said retaining investors was more difficult than in years past. More than 60 percent of chiefs report that to be the case this year. “We talk to investors constantly with the goal of having them keep their investment in our company or attracting new investors,” says Abhi Talwalkar of LSI. “But a lot of people in the investment community are focused only on two quarters out. When we talk about our great product line and growth over the next two years, it often falls on deaf ears.”
Talwalkar says he tries to overcome this hurdle by emphasizing the rich pipeline of customer commitments his company has and how that will drive top-line growth. Digital content, for example, is growing about 50 percent a year, he says. “With sites like YouTube that have billions of minutes of video being watched, or social-networking sites that are getting more sophisticated with the addition of video,” he says, “data storage needs are growing, and we’re in that business.”
The one issue that the majority of CEOs agree on is that the war for talent is pretty much over — or at least on pause. Nearly 70 percent of business leaders say it’s easier to attract and retain employees in the current environment. Last year only about a third of those surveyed felt that way. Yet even though CEOs say turnover is down significantly, they acknowledge the challenge of keeping current workers motivated. Says Scott W. Smith of Vanguard Natural Resources: “The big question going forward is, What’s the next carrot we can offer them in lieu of salary increases?”
