The IF Blog » Business Spending

Labor Getting Crowded Out?

Administrator — Tue, 04 May 2010 21:56:43 +0000

Companies have gotten lean during the recession, and in many cases that has led to increased profits. Technology has advanced to the point where mobile applications, real-time online collaboration and video conferencing provide inexpensive alternatives to having workers in an office, and the Internet allows companies to easily access brain power across the globe.

Tom Ringo, the head of IBM Human Capital Management (the consultancy arm of the company), said the firm’s global workforce of 390,000 permanent employees could be reduced to 100,000 by 2017, the date by which IBM is due to complete its HR transformation program. Ringo said the firm would employ “crowd- sourcing” and re-hire workers as contractors for specific projects when necessary, adding, “There would be no building costs, no pensions, and no healthcare costs, making huge savings.” An IBM spokesman later said Ringo’s comments were without merit. (Personnel Today, 4/23/10)

Whether IBM actually makes the transition to a mostly crowd-sourced workforce or not, the fact that it has discussed the possibility is significant. The expectation has been that hiring would increase not long after economic growth, but has this recession taught companies new lessons about the merits of lean staffing and the possibilities of technology? Might we see a significant segment of the U.S. labor force become permanent freelancers, doing work on demand?

Eric Zavolinsky

Emerging Marketing

Administrator — Tue, 09 Feb 2010 21:50:20 +0000

Is marketing a real “green shoot,” instead of the bogus ones touted last summer? Marketing departments seem to have money and plans on how to spend it.

We have seen and commented on the decline of advertising in traditional media for several years. It may be possible that the next cyclical upturn will portend a return of ad dollars to traditional media outside the U.S.

Estée Lauder unveiled plans to spend $150 to $175 million more on marketing expenses in the second half of 2010 than in the same period one year ago. This includes advertising, in-store merchandising and product sampling. The company plans to make its largest historical investment in TV ads within developing markets as well as global digital marketing. (Women’s Wear Daily, 1/29/10)

Lauder’s moves outside the U.S., when combined with Proctor & Gamble’s recent announcement that it plans on ramping up its ad spending in the second-half of 2010 and our January blog post about increased marketing spending coming from financial firms, suggests a de-thawing of advertising and marketing budgets, at least among some Fortune 500 companies.

Risa Hess

Corporate Spending “Green Shoot”?

Administrator — Tue, 12 Jan 2010 23:11:39 +0000

Are businesses getting ready to re-open their wallets?

Marketing expenses at Wells Fargo increased by 70.4 percent from the second to the third quarter, jumping from $71 million to $121 million. U.S. Bank saw an increase in its marketing budget of 64 percent quarter to quarter, actually doubling the figure of one year earlier (roughly $52 million to $105 million). Bank of America’s marketing spending increased from $257.6 million in the second quarter of 2009 to $282.1 million in the third quarter. (US Banker, 1/10)

Are these increases in marketing expenses the first signals of corporate spending – a category missing from the much-touted economic “green shoots” – becoming vibrant again?

Ken Hey