Businesses adjust to more realistic performance goals
TORONTO, Feb. 29, 2012 /CNW/ - Levels of stress felt by business leaders have shown their lowest annual increase since 2005 according to a global survey of 6,000 businesses conducted for the most recent Grant Thornton International Business Report (IBR). With economies depressed and the outlook for many still uncertain, this raises the question of whether business leaders are alleviating stress by scaling back on their goals—and possibly adding a further brake to growth—or whether they have learned to better manage the challenges they are facing.
In 2010, net1 45% of business leaders reported an increase in stress levels over the previous 12 months, but this fell to just 28% in 2011. And the pattern is consistent in many parts of the world—except Canada. Net 20% of business leaders in the United States cite an increase in stress in the last 12 months, compared with 36% in 2010. At the other end of the scale, Asia Pacific is the most stressed region with net 44% reporting an increase in stress over the past 12 months, down from 58% in 2010. Even in distressed Europe, where the focus of economic turbulence resides, the net increase in stress has declined from 40% in 2010 to 22% this year. Bucking the trend, research shows that net 18% of Canadian business people report an increase in stress levels, slightly higher than last year (16%) but still well below historical levels (such as 2007, when net 29% reported an increase in stress).
"As the economic crisis has continued, the majority of business leaders have learned to better manage the challenges they are facing, including dealing with stress by adjusting to more realistic performance measures and goals. This is just as true in the booming BRIC economies as in troubled Europe," says Ed Nusbaum, CEO of Grant Thornton International. "What we are seeing from our clients across the globe is more effective management of this economic volatility and uncertainty. Businesses have also learned to analyse risks better, factoring them into their performance, and are setting themselves more realistic targets. And, of course, some businesses are faring well despite the bleak economic backdrop."
The IBR indicates that reaching performance targets is by far the biggest headache for businesses—globally, 30% of business leaders cite it as the major cause of workplace stress, and it is ranked highest in 37 of the 40 economies covered by the survey (with Canada at 28%). Stress caused by the volume of communications (11% globally and 9 % in Canada), office politics (11% globally and 16% in Canada) and work/life balance (9% both globally and in Canada) are much less cited.
"The increased demands on managers that occur during periods of economic volatility have the potential to increase stress levels. However, people always try to actively manage the demands to reduce these levels. Since they are unable to do much about the pressures coming from the external business environment, they must look internally for the solution," says Professor John Maule, an expert in Decision Research at Leeds University Business School in the United Kingdom. "With achievement of performance targets the greatest contributor of stress for business owners, by reducing these goals they can lower the discrepancy between what they want to achieve and what might happen. This is an effective strategy for reducing stress, but the consequence of lowering performance aspirations will decrease economic activity—this at a time when it is most needed."
"These numbers show an encouraging pattern, and there are things that can be done by growing businesses—and businesses that want to grow—to reduce stress even more," said Bill Brushett, National Client Services Partner, Grant Thornton LLP in Canada. "Employee engagement is an important engine to a growing company, and we are finding that many businesses are now recognizing and reacting to the increased expectations on employees given the global economy. Many are, at the same time, instituting helpful programs like flexible work arangements or secondments in other regions—all programs that Grant Thornton member firms around the world have utilized with positive results."
The IBR indicates that just 42% of business leaders take a holiday to relieve stress despite a clear correlation between the number of vacation days taken by business leaders and their levels of stress. Canada does much better at 58%. Those countries where businesses take the fewest vacation days—such as Japan, mainland China and Thailand—report the biggest increases in stress. Conversely, business leaders in the Netherlands, Russia and Denmark took the most days off in 2011 and reported the lowest increases in stress.
The Grant Thornton International Business Report (IBR) provides quarterly insight into the views and expectations of over 11,500 businesses per year across 40 economies. This unique survey draws upon 20 years of trend data for most European participants and nine years for many non-European economies. For more information, please visit the IBR website at www.internationalbusinessreport.com.
Note to editors: Bill Brushett, National Clients and Services Partner, Grant Thornton LLP, is available for interviews.
The research is carried out primarily by telephone interview lasting approximately 15 minutes with the exception of Japan (postal), Philippines and Armenia (face to face), mainland China and India (mixture of face-to-face and telephone) where cultural differences dictate a tailored approach. Telephone interviews enable Grant Thornton International to conduct the exact number of recommended interviews and to be certain that the most appropriate individuals are interviewed in an organisation which meets the profile criteria. Data collection is managed by Grant Thornton International's core research partner, Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. From 2011, fieldwork takes place on a quarterly basis every quarter with fieldwork lasting approximately one month and a half.
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 6,000 business leaders across the globe conducted between September and December 2011. The target respondents are chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) from 40 economies primarily across five sectors: manufacturing (25 per cent), services (25 per cent), retail (15 per cent) and construction (10 per cent) with the remaining 25 per cent spread across all sectors. Locally, the sample tends to cover the sectors mentioned previously, with some countries being able to have local valid data for specific sectors or regions when the sample size is large enough.
|Group/region||Economies included in IBR|
|Asia-Pacific (APAC)||Australia, Hong Kong, India, Japan, China (mainland), Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam|
|Association of Southeast Asian Nations (ASEAN)||Malaysia, Philippines, Singapore, Thailand, Vietnam|
|BRIC||Brazil, Russia, India, China (mainland)|
|European Union (EU)||Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain, Sweden, United Kingdom|
|G7||Canada, France, Germany, Italy, Japan, United Kingdom, United States of America|
|Latin America||Argentina, Brazil, Chile, Mexico, Peru|
|Nordic||Denmark, Finland, Sweden|
|North America||Canada, United States of America|
|Other||Armenia, Botswana, Georgia, South Africa, Switzerland, Turkey, United Arab Emirates|
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Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms. These firms provide assurance, tax and specialist business advice to privately held businesses and public interest entities. Services are delivered independently by the member and correspondent firms within Grant Thornton International, a non-practicing, international umbrella entity organised as a private company limited by guarantee incorporated in England and Wales. Grant Thornton International does not deliver services in its own name or otherwise. Grant Thornton International and the member firms are not a worldwide partnership.
1 Net figures show those indicating an increase less those indicating a decrease.
Image with caption: "Not so stressed - Percentage of businesses indicating an increase in stress in past 12 months less those indicating a decrease (CNW Group/Grant Thornton LLP)". Image available at: http://photos.newswire.ca/images/download/20120229_C8310_PHOTO_EN_10585.jpg
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