Blogs

Jo Geraghty

Director

The Fiscal Cliff

Date added: 14th Jan 2013
Category: Customer Experience

Markets across the world sighed with relief at the last minute financial deal designed to prevent the USA from falling over the fiscal cliff and in the process potentially taking much of the world back into recession.  That the deal was necessary was down to the Budget Control Act of 2011, the result of which would have been the end of private and business tax breaks coupled with strict budget cuts; all starting at midnight on 31 December 2012.

 

The compromise sees tax rises only for the wealthiest of Americans and a two month delay in the imposition of budget cuts to give the politicians more time to review spending.  However, as markets rose on the news of the deal, commentators were warning that this is really only a stay of execution.  So whilst commentators from the World Bank welcomed the deal, they also emphasised the need to “put US public finances back on a sustainable path without harming the still fragile recovery.”

 

The US financial juggling act may be playing out on the world stage but it is one which is mirrored in businesses small and large across the world.  When times are tough businesses need to walk a very fine cost and charges line with small deviations potentially resulting in disaster.

 

This not only puts strain on the directorate but on every individual within the organisation.  Worries over job security coupled with a drive to maximise output and reduce wastage can all affect the mood of the workforce and therefore business efficiency. Taking steps to engage the employees in the aims of the company will help not only to redress the balance but sway it towards a situation in which all employees are working for the good of the organisation.

 

Businesses underestimate the effect of continued uncertainty at their peril but with a strong company culture and engaged employees, organisations are much more likely to emerge from the downturn stronger than ever.

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