Demand, Supply, and Changing Attitudes
The high demand for executive leadership talent is showing no signs of abatement and likely won’t for many years to come. This demand is being driven by a number of unstoppable forces. Three of which are:
The median age of a baby boomer in Canada is 71 and the youngest turns 58 this year. Leaving the workforce is on the minds of all but a few boomers, and for every one that chooses to leave, there is 0.7(1) of an employee to replace them. Yes, as we strive to grow our economy the workforce is getting smaller not larger. Automation, technology, and immigration will fill a portion of that gap, but rarely at the executive level.
The millennials have surpassed the boomers in cohort size, but the oldest of this generation, at 41-years-old, are just hitting their stride.
Professionalization of executive teams in more organizations
At McDermott + Bull, we’ve specialized in retained search at the executive level for 21 years. Over that time, we’ve experienced several trends, one of which is the growth and investment of private capital.
A high percentage of our business is focused on supporting the portfolio companies of private equity (PE) firms and family offices. Not too long ago, a PE firm would call us to support the growth of the executive team of a $200 million newly acquired company. Now, in addition to those calls, we are asked to support much smaller companies. I spoke to two PE firms last week that asked us to support the “professionalization” of the management teams of sub $30 million companies. Combine this with the previous demographic’s discussion and it’s clear that there is a rising demand for a shrinking pool of executives.
Mix in a global pandemic – a phenomenon that very few people (even those oldest boomers) can remember living through, let alone leading a company through. Any way you measure it, the COVID-19 pandemic has caused people at all professional levels to rethink their relationships with their employers, and in many cases with work itself.
Yes, the statistics are different geographically, demographically, and across professions, but the consistent theme is: people have changed how they think about “work.”
Solutions for Your Leadership Teams
Retain Your People
Yes, our business is based on your key executives leaving and you needing to replace them. However, I speak to investors and CEOs about retention every single day.
- Focus on keeping the talent you have. Work hard for your best people, because your best are likely on somebody else’s wish list.
- Make certain you are meeting their needs. The top three things we see employees asking for are:
- Flexibility: hybrid, location, or just understanding. Create space so that they can effectively manage what else is happening in their lives.
- Communication: “Where are we going? How are getting there? What is my role?”
- Trust: transparency, timely communication, and visibility in everything you do.
Invest in Your Leadership Team’s Development
Remember the saying, “People leave managers, not companies.” For further information on this, read “”6 Strategies to Boost Retention Through the Great Resignation,” published by HBR. (2)
Focus on Your Employer Branding
This is one of the most impactful ways to move the needle when attracting top talent. Make yourself attractive to the talent you seek. What is important to them? Showcase it in your brand. You are selling your company to a tight talent pool – how do you stand out?
- Have a compelling value proposition against your competitors. Be prepared for questions like: What sets the company apart? What does the company do differently? What keeps you here? Tell me why I should join your team. These questions can be uncomfortable – become comfortable with them. The most talented candidates are looking for compelling answers because they have options.
- Have the self-awareness to ask yourself, “What is our corporate appeal and how do we exploit it?”
- Expectations are changing – make sure you’re keeping up.
For further information about this topic, read “Make Your Employer Brand Stand Out in the Talent Marketplace,” published by HBR(3).
Tighten Up Your Hiring Timelines and Recruiting Process
The process must be dynamic, interesting, compelling, nimble, and efficient. Plan your interview process. Have your team lined up and expecting participation, including your third party industrial psychologist (whose practice is likely booming). Tell the candidates right away what they can expect. These steps are integral because:
- Candidate liquidity has never been higher.
- Candidates today have shorter attention spans, and top candidates are often in more than one process — or will be if you vacillate. As a result, you have less time to sell the job opportunity and assess their qualifications.
- We have seen more declined offers, and counteroffers, in the past 24 months than in the past 10 years combined.
- Remember: you are convincing this individual why they should leave their present role and choose your offer over another, while assessing their qualifications and fit for your company.
Enjoy yourself out there and remember, it takes two things to grow a company: capital and people – they are synergistic!
About the Author
Dan serves as a Partner at McDermott + Bull, based in the firm’s Vancouver office. He has 20+ years of search experience across a range of industries, including healthcare and life sciences, consumer goods, and food and beverage. In his practice, Dan partners with private equity firms and their holding companies along with public and private companies to assist them in sourcing and engaging key executive talent nationwide.