The correlation between poor financial performance and “staffing adjustments” has long been a truism for corporate governance. Domestically, the current impact is pervasive and deep – construction, real estate, mortgage bankers, broker-dealers, investment firms, and a host of market participants servicing the end-to-end value chain. It could be tongue-in-check argued that the only groups not feeling the pressure as a result of the market adjustments are the auditors and legal teams. However, with the widespread adoption of globalized resources, the impacts may not be as pronounced as they have historically.
Whereas the domestic impact is severe and has at least another six months of uncertainty, it is likely that globally distributed operations will experience a windfall of lasting benefits. It is not something that is overtly touted, mentioned on a balance sheet or in interviews with the press – but it is there nonetheless. As the global economic markets continue to shift and as sovereign wealth funds begin flexing their newly minted financial muscles, the impact to domestic operational processes may experience acceleration to offshore locations. Even though the market volumes may stabilize and increase as the cycle turns positive early in 2009, the workforce mix will change not only due to aging baby-boomer populations, but skilled global worker availability, “forced” M&A events, and increasingly specialized process compartmentalization.
The headlines are full of the aftermath of improper decisions made months and years ago – much like assumption of an unhealthy personal life-style. Even the trading markets established to take the shock –ABX, “Super SIV” – have not materially aided those seeking “quick fix” lifelines and it is difficult to ascertain they can materially aid the markets during this current crisis. Regardless of whether we like the solutions or not, the most compelling option is to clearly embrace globalization and profit from it.