Yesterday I started to discuss the epidemic that we are seeing in the western business circles. Reduce costs to boost profits! With payroll the largest cost to companies, it is understandable that this is one of the first areas that companies look to reduce costs.
The picture at the moment in the western society is that as unemployment is raising, so is the ability for the consumers (bigger spenders than businesses) to continue spending. The long term view that companies need to take weighs and balances the costs versus the income needed to stay sustainable. With an unemployment of 10%, out of 50 houses in a street, 10 are greatly affected in their ability to pay bills. This will greatly effect their ability to pay for more than the essentials. As they stop spending money and reduce their budget, the companies in the area start to make less profit meaning that they will need to reduce their staff further. The unemployment and profits of companies go hand in hand heading in opposite directions. Higher unemployment = Lower profits! It is a growing trend, snow ball effect that eventually will tip over with company's closing their doors and even higher unemployment.
I believe than Human assets are the greatest asset of any company and need to be treated as that. I also believe that if nothing is done fast to hugely change the trend in Western Society, their will be no more profits for companies!
The picture at the moment in the western society is that as unemployment is raising, so is the ability for the consumers (bigger spenders than businesses) to continue spending. The long term view that companies need to take weighs and balances the costs versus the income needed to stay sustainable. With an unemployment of 10%, out of 50 houses in a street, 10 are greatly affected in their ability to pay bills. This will greatly effect their ability to pay for more than the essentials. As they stop spending money and reduce their budget, the companies in the area start to make less profit meaning that they will need to reduce their staff further. The unemployment and profits of companies go hand in hand heading in opposite directions. Higher unemployment = Lower profits! It is a growing trend, snow ball effect that eventually will tip over with company's closing their doors and even higher unemployment.
I believe than Human assets are the greatest asset of any company and need to be treated as that. I also believe that if nothing is done fast to hugely change the trend in Western Society, their will be no more profits for companies!
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