The Global Recruiter: Executive Thinking
Like all industries, the pandemic has had a marked effect on the world of executive hiring across the world. Adam Stolerman, Partner at TritonExec, details challenges and opportunities from the world of Executive Search, looking ahead to 2022.
The Impact of Covid: Nothing short of remarkable
With any recession or market crash, the recruitment industry is one of the first to be affected but equally, one of the first to recover. What we have seen in our industry in 2021 is nothing short of remarkable with demand for executives at an all time high in almost every industry. This following 2020 with one of the lowest demands for executives in memory. The pandemic has forced organisations to either curate or accelerate their digital transformation journeys which has led to a huge demand in leaders who can organise, facilitate, and sell these solutions. In addition, the change in the labour force dynamic with work from home and flexible working has dramatically increased the talent pool for employers on a global scale. It has also placed a lot more power into the hands of the candidate as they also have a much broader range of opportunities to chose from. What this means is that in a vast majority of cases, executives have multiple options and offers when they decide to look outside. Competition has forced the price of talent upwards and this is going to continue.
In more than 15 years, I have not seen companies fighting harder to attract or retain talent than in 2021 and we see this trend continuing to gather pace as we head into 2022. With such competition in the market added to their own clients demands, businesses are offering highly attractive and costly retention bonuses to key executives whilst offering large sign on bonusses and longer term guarantees on compensation than we would traditionally have seen. Again, with most clients’ demand increasing not decreasing, we see these processes and attitudes strengthening in 2022 making hiring even more costly for corporations and more lucrative for the candidate population.
Candidate Experience
Having said all of that, the biggest driver that we have seen in 2021 for the most successful hiring organisations is the experience they provide throughout the interview process. With such competition, the time a process takes, how many interview stages there are, how quickly an offer or contract is shared and how engaged is the hiring leader with the candidates throughout the process has had a bigger bearing on a company’s success than the financial package on offer. A strong balance of the two will decide the winners and losers as the war on hiring executive talent accelerates in 2022.
Zero-based budgeting
In a recent article I wrote on how the budget process has changed due to the pandemic, there was a particular focus on zero-based budgeting and its importance. This is how budgeting was always meant to be done. Rather than looking at previous results and applying sensible yet arbitrary percentage increases to revenue, earnings, cash and other measurables, perhaps we should look at every layer of the operation in a granular and macro way to more decide what teams and businesses can produce and therefore, what should be the true human capital cost. This approach can also facilitate a much better understanding of the cost base and focus the mind to a more strategic way of thinking. By collaborating and inviting multiple leaders and opinions to this approach, you are left with a much more holistic view of what is possible. It’s important to also consider the link between budgets and bonus pay-outs here too. Are leaders being incentivised by long term sustainable growth or to achieve a 12-month budget number? Organisations must believe in their ability to attract and retain talent, investing ahead of time for long term success or they will be left behind. We at TritonExec, for example, invest a great deal of time working with our clients on their demand planning to ensure that we can proactively pipeline talent with a view toward the future, as opposed to reacting to needs as they arise.
Never has it been harder to budget accurately for the cost of retaining and hiring talent. We have seen salaries rise by more than 20% on average in 2021 alone so HR and business leaders should be using rolling monthly budgets. Rolling budgets offer greater insight, stricter cost control and the ability to make decisions more quickly. Shortening the cycle periods and keeping a healthy centralised pot that can be called on for special situations is also a sensible approach to provide more flexibility than there has been previously in the planning cycle.
Professional Services & Technology hiring
At TritonExec, we have two distinct practices. Whilst very different inherently, there are a lot of synergies in what we are seeing when hiring at Executive level. Whether you are a multi billion-dollar global professional services firm with hundreds of thousands of employees or a VC/PE backed pre IPO fintech, we are being challenged to innovate, reduce the time to hire and provide HR Transformation services to provide scalability and the best experience possible for hiring leaders and executive candidates alike. In both these markets, scale and growth are at heart of everything we are doing. With new and emerging technology, the profile of an executive is changing all the time and that provides a great opportunity for organisations to embark on a change in mindset towards executive hiring. The process no longer has to be slow and cumbersome, and it must represent the people it is trying to attract. With Europe a little slower to come out of the Covid restrictions, a majority of the growth we have seen in these sectors has come from the US and Canada. The market in APAC, most notably in India has continued to grow and Australia’s resilience has been most impressive even with covid restriction remaining in place for much of 2021. Towards the end of 2021, we have seen demand in Europe increasing across all markets and we see this continuing in 2022. There has also been a distinct return to face-to-face interviews in Q4 of 2021 where possible and the impact of which on the speed in which processes can be completed is yet unknown. This will be interesting to track in 2022.
The Year Ahead
The Executive Search market is growing rapidly. Pretty much across the board, the market is as buoyant as ever and there is a lot of cash on hand to firms in hyper growth mode. With the tail wind of global digital acceleration, sustainable technology, and extensive demand, 2022 is set to exceed a record breaking 2021 for many executive search firms. There is certainly a war on talent with ever increasing power in the hands of the executive.
Originally published on The Global Recruiter.