Technology is just one of the forces changing business views on Executive Search methods that are charged with finding, keeping and developing top talent. Like all Executive Search firms we look at trends every year and here we offer a perspective on them for our Executive Search and Recruitment clients and prospects.
"Artificial intelligence will become more important"
AI has been growing in importance for several years and is generally making steady and subtle progress. There is no doubt that AI is becoming more effective in the candidate searching process.
Executive Search firms are able to identify who, and where, the best talent is more quickly. Essentially this has replaced the old "research" phase of an Executive Search process and once you can be precise about what you are looking for, and where, you can set the Bots to work in whatever form they take.
Sometimes, when taking a client brief, the insights come from the conversation between the hiring manager and the consultant. Additionally, as a consultant you often build up a picture of the right place for talent based on what they have previously considered and not considered and why. It's pretty hard for AI to evaluate desire in the way an experienced consultant can. Handing all of this over to AI increases the risk of cookie cutter Executive Search.
"There will be a growing trend towards freelance executives"
At 1st Executive, we are advocates for Interim Management, largely based on the European model.
Australia has some of the best conditions in the world for Interim Management to succeed. Independent, highly skilled, autonomous executives can deliver significant impact. This is especially true in areas of change, that existing, stretched executive teams can not have the same impact in - they are already stretched..
It's a pipe dream. Our own extensive and published research tells us that C Suite executives can see the theoretical benefits and have generally experienced the shortfalls that come from stretched executive teams when it comes to major change or new initiatives. However, they are reluctant to provide authority to an interim executive, thereby drawing him or her into the political decision making arena that needs to be avoided. In fact, they told us that they are quite unlikely to engage an Interim Manager - so we are back to mere contracting to keep headcount off the financials.
"Companies will seek out younger talent"
In our experience what they are looking for are up to date skills and contemporary outlooks.
The obvious benefit is to counter an ageing workforce. Then there is the perception of the anticipated injections of energy and the feeling that once a firm has this talent on board, it can develop them for the future.
The demographics of an ageing workforce means that there is a smaller "youthful" talent pool, so businesses have to compete for talent more. In addition, while developing skills is important, the incontrovertible truth is that experience can only be accrued a day at a time. The expectation of long careers with one employer went out of the window for employers and employees a decade or three ago. Executive Search firms who are truly consultants - will guide their clients to the best talent for the medium term challenges and opportunities, navigating from skills, through competencies, values and potential while recognising that strategy will inevitably develop with change in external conditions. All this talent may not reside within Australia at the time of the search, so international reach is imperative.
"Developing talent internally will reduce recruiting costs and improve business performance"
Talent needs to be developed to meet current business challenges and to be focused on the roles that create and protect business value.
Developing talent absolutely helps with employee engagement and will certainly enhance short term results.
Many firms do not have a strategic, economic value added approach to talent development. So, what can happen is employees are developed to a level of capability that the level of work at the firm can not sustain. This Scenario is also at odds with Scenario 2 - the thought that independent workers will become more dominant. Also, recruitment costs are a myth that is targeted by cost focused accountants. Taking, say, a 24% of year one salary search fee for a role expected to produce 4 times more value than remuneration and then expected to stay in the C Suite for around 5 years pays for itself in the first simple operational decision made in most instances. Think about that in the context of the first highly trained but inexperienced mistake from an executive promoted too quickly - there's no comparison.
Everything old is new again, and without tacit acknowledgement of that, the risks associated with employing people are only likely to increase. Technology, including AI, will help organisations find talent better matched to their needs. However, technology needs to augment judgement and without the right input, output will be flawed. Garbage in, garbage out!
We'd love to see more Interim managers accepting roles that are designed to accelerate change - there are a number of industries in Australia crying out for change, but with only a third of change initiatives succeeding (see http://www.1stexecutive.com.au/change-success) business leaders need to not only employ the expertise on outcomes based contracts, but empower these executives to get the job done.
Finally, with regard to talent and development, we are seeing trend towards learning and development that actually produces outcomes quickly. managers love learning tools that they can use to work on business issues now. Blended learning programs, often facilitated by external resources but held in-house can focus this learning on current business challenges and align teams behind the challenges in hand.