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A survey of business leaders by McKinney Rogers shows that more should be done by business leaders to avoid the risk of slipping into recession.

The research report, called Economic Recession – Perceived Risks and Rewards, encompassed Europe, Africa, Asia Pacific and the US and was designed to gauge the perceptions and awareness of global business leaders on how the current economic climate affects their business and what steps can be taken to minimise exposure to recession.         
 
Commenting on the research, Richard Watts, Regional Partner for Europe at McKinney Rogers at McKinney Rogers said: “With UK inflation rates hitting a ten year high and the continually weak US dollar, it is not surprising that business leaders should call on governments and financial communities to do more to help fight off the looming recession.

Watts went onto comment on the universal nature of the call for more government interaction, citing those in economic regions that are yet to feel the impact of the credit crunch.
 
Four in five business leaders polled call on governments to reduce inflation in a bid to ward off the risk of recession, while over two thirds (69%) think interest rates should be lowered. Tax cuts (64%) and improving liquidity by pumping cash into the economy are also considered key initiatives.
 
Those questioned also saw the financial community as having a vital role to play in taking action to limit the risk of recession. Nine in ten respondents cite reduction of interest rates in line with central banks as an important move.

Two thirds (64%) think the financial community should increase self regulation while more than half (59%) call for improved compliance with existing regulations.
 
Furthermore, over half of respondents (57%) think the financial community should take smaller lending risks while 49% think banks should improve liquidity by lending more to each other. A significant number (44%) also highlight reducing staff bonuses as an important issue.
 
“These results highlight a real need for government and financial leadership during a time of economic uncertainty. Business leaders cannot rely solely on government and financial support however, and should make sure they have their own plans in place to limit the damage of a potential recession,” said Watts.

This announcement follows yesterdays report by McKinney Rogers calling for the continued developing of skills and abilities in their workforce, having a clear strategy and focus in place and taking an offensive rather than defensive approach to business.

Workforce development

An overwhelming 78% of respondents cited the development of their workforce as the key tool for this, while 73% agree that moving into emerging markets that are unlikely to be affected by recession is also important.

Diversifying the business offering was classed as significant for 67% of those surveyed.
 
Conversely, reducing the number of employees (34%) and reducing marketing spend (23%) were classed as the least important tactics to pursue in safeguarding against recession. Other initiatives cited in the research were cutting prices to become more competitive (38%) and consolidating business premises and locations (50%).

When asked about the importance for businesses to have plans in place to reduce their exposure to the risk of recession, a staggering nine in 10 business leaders agreed that this is now very important. Despite this high figure, a relatively low number (32%) have advanced or very advanced plans in place, indicating that many companies might be caught short in the event of a recession.