Being part of NPAworldwide, as well as having other private networks internationally, provides a unique perspective on the challenges facing both developed and developing economies when it comes to sourcing and retaining key talent in organisations. Obviously, we see this both through partners’ eyes and through the eyes of the clients who employ us and we believe that one common thread of consistency is that none of it is as we would have expected.
From a recruitment industry point of view, the immediate future appears bright. This is a paradoxical reality while storm clouds gather on the horizons of developed economies with inflation and interest rates on the rise, various levels of political instability, the re-establishment of movement of labour across international borders only just starting to make progress, and the added challenge of European conflict impacting both supply chains and confidence.
At the heart of this optimism for the industry is an understanding that many of our clients’ businesses who rely on different types of labour are going to find the sourcing and retention of key talent an enormous challenge which will compound many of the challenges being faced from other areas. It is almost always the case that employment data is a lagging indicator of economic performance; however, there does appear to be a level of commercial determination to ride these economic headwinds out and continue to build businesses that will be sustainable in the future.
In looking at four of the key recruitment disciplines:
1. General White-Collar Recruitment
Across most developed markets, performance here is patchy, yet there are key trends that are emerging consistently:
- Junior and mid-level roles in administration, customer service, sales, healthcare and supervisory roles in hospitality are becoming increasingly difficult to fill. Most developed economies have lost their steady flow of part-time foreign students and most of these roles have traditionally been filled by younger workers in what are now consistently ageing workforces.
- This has seen competition for labour increase substantially and this is often reflected in remuneration, with those employers reluctant to “meet the market” finding real challenges even in getting people to apply for roles
- In addition, younger cohorts of workers have become accustomed to work from home and hybrid work from home flexibility. Clearly, some employers have been able to work with this by the operating models of others simply do not make it possible.
- While much has been written about “The Great Resignation,” it has also been the case that people who work in an economic environment with perceived instability have been reluctant to look beyond the current employment opportunities.
2. Blue Collar, Semi-skilled and Unskilled Recruitment
This is a category that varies enormously across markets, but some of the constant limiting factors include:
- Ageing workforces, particularly where there is a physical component of a role
- An increased understanding by workers in this category of their value, leading to them demanding higher pay, better conditions, and an expectation of the development of enjoyable working environments. Organisations that are not particularly people-centric may attract such workers with money, but they will likely lose them without changes to workplace culture. This has been a particular challenge for hospitality, food production, aviation, and healthcare.
3. Executive Search
C-Suite and highly specialised and skilled technical roles have been less affected by border closures and the mobility of labour. Employers always find a way for key talent, and most governments moved quickly to allow more freedom of movement once the strict pandemic lockdowns ended. Key trends that we have seen influencing executive search include:
- A higher level of restlessness among senior executives about the work-life balance price they have paid for the privilege of executive positions and high salaries
- We are seeing greater availability of talent exiting, for example, stock market-listed companies, and preparing to take on leadership roles where they feel more involved in the operations and with turnovers in the $250 million-$1 billion range. The employer response seems to be either positive acceptance of the opportunity or a quizzical “why would they want to come and work for us” level of scepticism
- A significantly greater focus on the performance of branch locations, particularly by companies with American and European head offices. This has created high performance expectations, some turnover, and many more opportunities for C-suite executives in larger SMEs and small corporates.
4. Interim Management
Interim Management (which we differentiate from standard fixed term contracting unskilled roles) has been a significant beneficiary of the first 12 to 18 months of post pandemic activity:
- There are many executives for whom the restlessness mentioned above has changed into a complete re-evaluation of the whole way of working. There is significant appeal for a seasoned executive in the opportunity to take on a situational leadership role for a fixed term. This could be transformation, restructure, any one of three M&A stages or a turnaround for example, deliver a result over three, six or 12 months, walk away, take a break and then do it all again.
- The economic and environmental conditions that have forced businesses to look hard at performance have also seen them looking beyond existing management teams for solutions.
- Ironically, as many more markets are seeing the advantages of true interim managers, some governments have wrestled with nervousness about their own effectiveness in managing taxation and compliance of such highly skilled labour and have over the last few years been guilty of managing some clumsy legislation rather than an understanding of how such roles are highly likely to be catalysts for growth.
While volumes and activity in most sectors of the employment industry continue to be high and supported by high levels of demand for specialist recruitment skills in the need for innovative ways to secure talent, things may change as economies slow. However, skill shortages are generally demographically driven and will be with us for some time.
On a macro level, there have been, over the last 10 years, a variety of services and technologies that have “spelled the end” for the traditional recruitment industry. However, this is proven not to be the case. As evidenced by almost 600 member firms in NPAworldwide and a variety of other recruitment, executive search and interim management networks, the industry is, despite common misconceptions, highly collaborative. Industry “death knell” developments such as automated Internet searches and AI have actually been adapted faster and better by the industry. The recruitment industry’s singular focus on the sourcing of key talent for top clients in a variety of scenarios makes it very difficult for their expertise to be surpassed.