An early glimpse at the 2012 Business Priorities1 survey results shows a continuing concern about the impact of the overall economy on business. In the last year, many industries granted major concessions in the form of discounts and promotions in order to win business. Take retail, for example. Early 2011 final sales numbers showed an increase in retail sales, but at a price. In the short term, retailers were able to lure customers in with seasonal offerings for the holiday season. But the ongoing issues that retailers will have to face are the coupon craze and promotions that will continue to keep pressure on prices.
January 2012 will continue to see the inventory liquidation margin squeeze as retailers discount before applying inventory markdowns and subsequently moving goods to outlets for unsold merchandise. Great news for bargain hunters, but clearly, companies need to find ways to generate more cash from the business.2

Source: ChainLink Research
Figure 1: Top Organization Obstacles
Further hindering corporate growth is that economic uncertainty is limiting expansion plans. Several manufacturers in high tech, consumer products, and healthcare products expressed these concerns. Some of the comments suggest that manufacturers also expect to continue cost saving measures to free up capital to gain business in the future, “. . . creating the cash to invest in growth.”
What Else Is Hindering Growth?
Interesting commentary from respondents further revealed that although there is still +8% unemployment, they were having challenges finding and retaining talent, as well as difficulty finding the ‘right’ people. This was a particularly interesting comment, that it is “Hard to Find Quality People with Right Skills [sic] and experience to fill job openings.” At industry events I often attend, I hear comments such as this.
There are issues in opening facilities in certain regions of the US due to the lack of a skilled employee base, even when government-backed loans and favorable tax arrangements would make it advantageous for new sectors such as alternate energy, solar, or nanotechnology manufacturing. In addition, logistics services and technology companies have consistently told us that their consultants are fully utilized and they are hiring. Obviously we are mismatching our educational system to the opportunities afforded by growing, or at least stable, sectors of the economy.
That said, don’t expect a salary increase. Several respondents mentioned that they’re concerned about, as one respondent noted, “the high cost of hiring talented people” as a growth obstacle. Managing costs as a trade-off for hiring will surely still be with us for some time to come.
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1 We will issue a special publication on this later in the month. — Return to article text above.
2 Planned investments for 2012 reflect some of this. — Return to article text above.
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