- Geopolitical instability, inflation and concerns about recession cloud the global business outlook, making C-suite executives reluctant to consider new appointments.
- The availability of talent seeking new opportunities will increase alongside largescale layoffs in the tech sector, easing the shortage of recent years.
- Belt-tightening could lead to a new spike in demand for executive talent experienced in reorganization and turnarounds should recession take hold.
- Talent management, especially of remote teams, has become a general competency required of all senior leaders, not just HR executives.
Kestria partners representing 53 offices across the globe responded to a series of survey questions aimed at shedding light on how geopolitical and macroeconomic forces were impacting the growth outlook and talent market.
Events in Ukraine and related geopolitical instability, especially between the US and China, along with rising food and energy prices driving inflation, higher interest rates and the increasing cost of capital, were cited as impacting businesses across the globe. An uneven economic recovery, corruption, political uncertainty, migration and climate change were other challenges cited by respondents.
Senior leaders have become increasingly wary of changing posts as a reaction to the heightened sense of uncertainty, exacerbating a talent shortage for C-level positions, according to most respondents surveyed, though a handful indicated an increase in movement seeking to take advantage of higher salaries. In some industries, like hospitality, the talent shortage has been especially acute. Respondents were overwhelmingly aligned in noting the preference for flexible working conditions among senior leadership candidates. Emigration of talent away from emerging markets was cited as a troubling trend exacerbating local talent shortages, while the need to capacitate and upskill leadership talent was also highlighted by several respondents.
Respondents identified a wide range of skills and attributes deemed most critical to organizational success in the current environment of uncertainty and volatility. The most essential skills and abilities identified in the survey were:
- sustainability and growth-mindedness
- multicultural fluency
- remote team management
- strategic vision
Talent acquisition and retention strategies have been honed by the challenging labour market over the past few years, Kestria partners noted in their responses. Better engagement with educational institutions, improved salaries and benefits, and more flexible working conditions were cited as among the most effective talent acquisition strategies, while enhanced communication and employee engagement, incentives and bonuses, professional development opportunities, an attractive, socially, and environmentally responsible corporate culture, and a sense of purpose beyond profit were cited as the retention strategies gaining favour in recent years.
Kestria partners highlighted several common challenges to securing the right leadership. Chief among them was the shortage of, and competition for, qualified talent, followed by the gap between salary expectations and offers. It was also noted that clients and candidates have become more selective. The mismatch between evolving demands and expectations on the part of a younger generation of candidates and the companies seeking to retain talent, was also cited as a challenge, along with an increase in fraudulent candidates.
Notwithstanding the challenges, job market opportunities abound, and Kestria is in a privileged position to leverage its global network to present the right candidates, respondents noted. A new generation of senior leaders is focused on contributing to the development of emerging and traditional industries, with a growing number of employers seeking diverse candidates. Innovative industries and disciplines are creating opportunity for candidates with specific skill sets and competencies, including in IT, smart tech and automation, sustainability, healthcare, renewable energy, communications, and agriculture. Growth-oriented mid-size companies, especially, continue to represent opportunity for candidates and recruiters.
“Most executive search firms experienced a strong year in 2022, with Canada-based Pender & Howe being no exception,” said Travis Hann (Kestria Canada & USA). “It’s been hard to find candidates to meet the demand over the past few years, but the tide is quickly changing amid concerns about a possible recession and layoffs at large tech companies, which are having a contagion effect and creating more of an employer’s market. Candidates are starting to be more realistic as a result and expectations have been humbled,” said Travis Hann.
The labor shortage is presenting a challenge for employers seeking senior leaders in the Philippines, where GDP is expected to grow by 7% in 2023, according to Grace Abella-Zata (Kestria Philippines). “Competition from multinational companies assembling remote teams in the country is exacerbating the local labor shortage and creating a war for talent. Sourcing and retaining talent have become strategic management issues for local and international companies alike because of the heightened competition, and talent management has become a competency required of all senior leaders, not just human resource managers. With the normalization of remote work, managing teams and building social energy among a geographically dispersed or hybrid workforce have become critical leadership skills.”
At Kestria South Africa, the demand for executive talent shows no sign of easing up, according to Advaita Naidoo (Kestria South Africa & USA). “As much as we’re affected by global markets, our markets can also be quite insular. We’ve seen an explosion in the amount of work we’re doing as companies want to capacitate on the continent. We’re moving away from appointing ex-pats to senior roles and appointing more Africans. Local candidates have benefitted as a result with large salary increases, which can still be considered competitive for international companies with local executives sometimes being provided ex-pat perks, which serve as effective attraction and retention measures.
The push for greater inclusion among international companies is having a positive spillover effect within local businesses, contributing to the demand for more women in senior leadership roles. This is where the talent crunch is most acute, as qualified and experienced women are both in high demand and short supply.”
Kestria’s partners in Europe have also been busy of late, according to Patrick Westerburger (Kestria Netherlands). “The past few years have seen major disruptions to supply chains and labor markets, and while temporary, these challenges have brought about lasting changes, with companies reinventing roles as they adopt new technologies. Candidates too have changed their outlook. People are looking for interesting work-life balance. This can mean something different for each candidate, like commuting to work on a bicycle, or establishing a social life around a new job. The record inflation impacting markets across the globe, meanwhile, is encouraging movement among senior executives in Europe, who see an opportunity to negotiate salary increases.”