CEOs say what we all think .... WA is different

Its not just the economic data which is showing a two-speed economy, anecdotal evidence from Western Australian CEOs shows the state is out on its own in many other regards, most notably in management issues and what staff demanded.

In a comprehensive survey of Australian chief executives released today by CEO membership organisation The Executive Connection, the data showed that WA business leaders were more confident about the future than their counterparts in other states.

The data also shows that WA business heads were facing different workplace patterns than other bosses, with less demand for WA staff to work from home but more WA employees want flexible work hours.

WA bosses also feel better about their interpersonal relationships with staff than their east coast colleagues.

Overall, the survey shows that the management influence of baby boomers is waning, that women are getting increasing power in the workplace and that new IR laws made hiring easier but generally had little impact on staff.

The key points about WA business were:

Economic issues:

• WA chief executives were more optimistic about the economy than other states with 35% reporting that it had improved during the past 12 months and 16% believing it will improve next year.
• 47% of WA CEOs will increase fixed investment expenditure in the next 12 months, the lowest of all the states
• 84% of WA CEOs believe their sales revenue will increase (highest percentage of all states) and none believing it will get worse
• 58% of WA CEOs believe their profits will increase in the next year, with only 5% believing profits will decline
• Plans for more staff were confirmed by 53% of WA CEOs, and none plan to decrease staff numbers

Workplace issues

• WA has the largest percentage of Gen Y (under 26 years old) management teams at 16% and only 16% of management teams are Baby Boomers over 45 years old.
• WA CEOs felt communication was the greatest workplace challenge (26%), but also indicated workload (21%) and unskilled staff (21%) were challenges
• WA CEOs identified delegation (32%) as their greatest people management issue, the highest of all the states.
• WA has the most females in management teams, with 43% of CEOs saying half or more of their direct reports are female
• 58% of WA CEOs rate their interpersonal relationships with staff as very good, by far the highest of the states with the next being Vic at 37%
• Workload is the greatest cause of stress in WA (58%), the highest of all the states. Also recruitment rated highly (32%), also the highest of all the states
• Only 22% of WA CEOs indicated carer requests were becoming more common, the lowest of all the states
• 50% of WA CEOs reported that flexible work hours are very important to staff, the highest of all the states
• 28% of WA CEOs suggested there was an increase in requests to work remotely, the lowest of all the states
• 50% of WA CEOs did not pay maternity leave, and 72% did not pay paternity leave
• 67% of WA CEOs indicated individual KPIs were the determining factor in salary increases, the highest of all the states with the next being NSW at 61%
• 22% of CEOs in WA said IR reforms made it easier to hire staff, and 94% said they had no impact on the attitude of staff.

Below is the full announcement:

Australian CEOs positive on IR reform impact

Baby boomers losing their hold on senior management

- Strong outlook for employment -

- Increasing pessimism on the Australian economy -

Nearly one quarter of Australian business leaders believe the new IR laws have made it easier to hire but CEOs are more cautious about the economy this quarter according to the latest survey of Australian chief executives released today by The Executive Connection (TEC), the world's leading CEO membership organisation.

"Despite one third of CEOs reporting that the economy has worsened during the past year and 85% saying it will not get better, they are still planning to increase investment in fixed assets and forecasting growth in their revenue and profit, which reflects caution in the economy but still positive sentiment," explained Mike O'Neill, chief executive of TEC. "While interest rates, oil prices and employment may be concerning CEOs, they haven't yet stopped their plans to expand because we are still seeing positive growth within their companies."

"Only 6% of companies plan to reduce staff, and not a single CEO in WA reported plans to cut employee numbers. The difficulty of finding good people is a big issue, and could explain the move to younger managers in the past year. Baby boomers managers (over 45 years) now make up 30% of NSW and Vic management teams, 40% of SA management teams, but only 15% of management teams in WA and Qld."

The Q206 TEC Confidence Index questions were completed by 265 Australian chief executive TEC members during the first two weeks of September 2006. The survey also focused on workplace issues.

Economy Highlights

CEOs who feel that economic conditions have improved almost halved since last quarter - from 32% to 18%.
Nearly one third of CEOs predicted worse economic conditions for the next twelve months
CEOs still strongly confident that their revenues and profits will increase in the next year
Less CEOs believe the Australian dollar will strengthen, 65% say it should stay at current levels
Only 6% of CEOs expect to drop staff levels - compared to 15% this time last year

Workplace issues - highlights

- Baby boomers are loosing their grip on the management team, with 27% of CEOs reporting that their management teams were predominately 45 years or older

- Female CEOs tend to have younger management teams

- In nearly 70% of companies run by female CEOs at least half of their direct reports are women compared to 32% of companies run by male CEOs.

- Communication remains by far the greatest challenge in the workplace, and is also seen as the key to overcoming personality clashes in the workplace

- The biggest people management issue remains lack of initiative

- 70% of CEOs report that business affects their private lives often while only 13% feel their private lives often affect their business lives. Both figures are down from last year indicating that CEOs are coping better with work-life balance.

- The highest staff stress levels are reported by CEOs in Western Australia and those in the manufacturing sector

- Workload continues to be the major cause of stress in the workplace, and female CEOs report this more often than male CEOs

- Mentoring is still seen as the best way of dealing with overstressed staff

- Requests for carer leave are still increasing, especially in the service industries

- Working remotely is a rising demand - nearly 40% of CEOs reported increased request levels - and this demand is highest in NSW with 46% of CEOs reporting this request from staff

- One third of companies pay up to 12 weeks maternity leave, and up to 22% of companies pay paternity leave.

- 93% of CEOs reported that the new IR laws have had no obvious effect on the attitude of their staff

- The new IR laws have made it easier for 22% of CEOs to hire staff, although 76% said there was no obvious effect

- Outsourcing had only increased by 2% as a result of the new IR laws

Economy discussion

CEOs who feel that economic conditions have improved during the last year almost halved since last quarter - from 31% to 18%.

NSW and Victorian CEOs were particularly pessimistic with 40% of CEOs in these states believing that the economy had worsened.
Nearly one third of CEOs predicted worse economic conditions for the next twelve months
CEOs across the country are still planning to invest in fixed expenditure, with 55% saying they will increase total fixed investments in the coming 12 months.
CEOs are still strongly confident that their revenues will increase in the next year, with 77% predicting revenue growth - WA being the most optimistic with 84% predicting good revenue growth
Profit growth is still expected by 58% of CEOs, with Qld leaders bullishly leading the way with 80% expecting growth next year. SA was the least positive, with less than 40% expecting growth and nearly 20% expecting a decline in profits.
Less CEOs believe the Australian dollar will strengthen than last quarter (15% versus 24%) and 65% say it should stay at current levels. The highest proportion of CEOs predicting that the dollar would weaken came from WA with 37% expecting a drop in the dollar.
Only 6% of CEOs expect to drop staff levels - compared to 15% this time last year. No businesses in WA expected to lower staff levels. The service industry was had significantly higher expectations of increasing staff, 65% compared to manufacturing at 41%.

STATE POINTS - WESTERN AUSTRALIA

Economy

• WA chief executives were more optimistic about the economy than other states with 35% reporting that it had improved during the past 12 months and 16% believing it will improve next year.
• 47% of WA CEOs will increase fixed investment expenditure in the next 12 months, the lowest of all the states
• 84% of WA CEOs believe their sales revenue will increase (highest percentage of all states) and none believing it will get worse
• 58% of WA CEOs believe their profits will increase in the next year, with only 5% believing profits will decline
• Plans for more staff were confirmed by 53% of WA CEOs, and none plan to decrease staff numbers

Workplace issues

• WA has the largest percentage of Gen Y (under 26 years old) management teams at 16% and only 16% of management teams are Baby Boomers over 45 years old.
• WA CEOs felt communication was the greatest workplace challenge (26%), but also indicated workload (21%) and unskilled staff (21%) were challenges
• WA CEOs identified delegation (32%) as their greatest people management issue, the highest of all the states.
• WA has the most females in management teams, with 43% of CEOs saying half or more of their direct reports are female
• 58% of WA CEOs rate their interpersonal relationships with staff as very good, by far the highest of the states with the next being Vic at 37%
• Workload is the greatest cause of stress in WA (58%), the highest of all the states. Also recruitment rated highly (32%), also the highest of all the states
• Only 22% of WA CEOs indicated carer requests were becoming more common, the lowest of all the states
• 50% of WA CEOs reported that flexible work hours are very important to staff, the highest of all the states
• 28% of WA CEOs suggested there was an increase in requests to work remotely, the lowest of all the states
• 50% of WA CEOs did not pay maternity leave, and 72% did not pay paternity leave
• 67% of WA CEOs indicated individual KPIs were the determining factor in salary increases, the highest of all the states with the next being NSW at 61%
• 22% of CEOs in WA said IR reforms made it easier to hire staff, and 94% said they had no impact on the attitude of staff.

About The Australian TEC Confidence Index

The TEC Confidence Index is conducted quarterly by The Executive Connection, the world's leading CEO membership organisation. The Q306 questions were completed by 265 Chief Executives from 1-16 September 2006. The global survey involves more than 1,500 Chief Executives from the US, UK, Canada, Malaysia and Australia across a range of industries including retail, legal, accounting, tourism, manufacturing and exporting.

The TEC Confidence Indexes are summary measures of the answers to seven identical questions asked in 5 countries. The questions focus on current and expected conditions in the economy, the firm's plans to expand employment and investment spending, and the firm's estimates of expected growth in revenues and profits. The index values are calculated as percentage changes from the initial survey which was conducted in March 2003.

The TEC Confidence Index also provides a focus each quarter on particular areas that are relevant to Australian Chief Executives, as follows:

Q1: Recruitment and Retention

Q2: Training

Q3: Workplace Issues

Q4: Leadership

For details on previous results, please view www.tec.com.au and click news or call Brian Pate on 0414 627 968.

About The Executive Connection

The Executive Connection is the world's leading CEO membership organisation for ongoing professional and personal development, increasing their effectiveness and enhancing their lives.

Members are placed in groups of up to 16 non-competing peers to gain insights and learn from each other's business experiences. Each group is led in a one-day session, once a month, by a TEC Chair, a highly experienced business professional. The day consists of interactive speaker sessions and issues workshops. The Chair also holds one-on-one sessions once a month with each member of the group to address individual issues.

With TEC, Chief Executives improve decision making, increase accountability, overcome isolation, and anticipate and manage change while networking nationally and internationally.

The Executive Connection was founded in the USA in 1957 with a global membership of more than 12,000 Chief Executives in 15 countries. The Executive Connection began in Australia in 1986 and currently has more than 1100 members in Australia and New Zealand. TEC is an affiliate of Vistage International Inc. For more information, www.tec.com.au