Adapting to change in the business industry

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According to the Young Presidents’ Organisation Global Pulse Index, confidence among CEOs in various markets in the world increased to 64.0 in the second quarter of 2014, the highest in three years.

“The survey consists of 3,000 CEOs around the globe, and the overall outlook was very optimistic. South Africa inched up a tenth of a point, and it went up to 61.9. Anything above 50 per cent reflects a positive sentiment. South Africa, East Africa and West Africa are the territories that we look at,” Julia Raphaely from Associated Magazines told CNBC Africa.

“I think what’s interesting about it is in terms of the three categories [sales, investment and employment], sales remained robust in terms of outlook, fixed investment was also very optimistic. Only 34 per cent of CEOs said that they would be hiring in the future, which I think was the most interesting finding from the survey.”

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Raphaely added that the entire business model and industry was however changing rapidly, which was one of the most challenging aspects company heads had to manage. A lot of fixed capital and investment is therefore required to transform one’s business in future as well as stay ahead of the curve.

“Sales, although optimistic, are coming off a lower base and I think one has to take that into account. In terms of the employment indicator, that’s what I find interesting. While we streamline our businesses, try to get [them] to run as efficiently as possible, we also need to be employing a completely different set of people,” Raphaely explained.

“I think that the capital required, the challenge of keeping your business as healthy as possible, and at the same time transforming your business model completely is an incredibly challenging one.”

Despite the strong sales and investments, African CEOs expressed reluctance to hire new workers. In South Africa, 34 per cent of CEOs were willing to re-hire, whereas in the United States, where 45 per cent of CEOs said that they would consider hiring more workers.

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“I think the trick is if you look at the type of people that you need in your business, it’s a completely different skillset, so you need a digital native versus a digital immigrant. Therefore, you need to be looking at millennials, for example, as a talent base and a group of people, the 18 to 34 year olds,” said Raphaely.