We recently closed the chapter that was 2021, a second year of dealing with a global pandemic and the uncertainty of the new variants that arose. We saw record stock market runs, enormous transaction activity for PE firms, and an economy that rose and recovered from the gut-punch that was 2020. On the negative side of the ledger, we experienced supply chain disruption, labor shortages at every level, and rising inflation. Overall, however, most companies shook off 2020, regained confidence, learned to be productive with a distributed workforce, and got moving.
The most impactful trend affecting our business of providing interim executives is the “great resignation”. We are seeing employees leaving their jobs in record numbers. Several factors are driving this vast talent gap and it will surely be a challenging issue for companies in 2022 and beyond.
Every year, our team meets with a large number of executives within public and private companies of many sizes and across most industries. In addition, we spend time with leaders of private equity firms and investment banks who invest in and optimize the performance of portfolio companies across the U.S. In these meetings, we seek to understand what leadership issues are most demanding for our clients and how they and their HR team plan to address them. In 2021, we saw common threads and strategies across our client base, and we have gathered those insights for you in this issue of our newsletter. We hope what we learned is helpful to you as you navigate your human capital challenges in this new year.
What are companies, HR teams, and PE firms doing to combat the leadership drought in 2022?
Enhance leadership retention by taking a fresh look at leadership hiring processes.
It is vital to hire the right executive on the front end and evaluate their fit within the new, more virtual organization. Today’s leaders need an array of new skills to be effective, including the ability to manage teams remotely and keep engagement high. Companies now rely even more on leadership empathy and skills such as project management, communications, and change oversight. Landing a new executive takes time, but a thoughtful hiring process pays dividends of retention down the road, so it’s well worth it.
Take advantage of remote work arrangements and pull in leaders from across the country.
Most companies don’t need their leaders on site every day, so this allows them to broaden their talent pool and recruit from other geographies. Companies tackle some functions such as finance and IT remotely more than others. Still, overall, we see our clients display tremendous flexibility regarding their in-person requirement and the home location of their executives
Develop their leaders to refill the leadership openings of the future.
Succession planning and leadership development are not new concepts, but it has been tough to execute on these facets of business continuity in the past two years. Increasingly, companies are leaning on coaching, mentorship, and career pathing to help identify, develop, and retain the leaders they will need in the coming years.
Evaluate compensation in all forms, including cash and other facets such as non-cash perks, flexibility, learning, mental health, and even fun.
Salary benchmarking and surveys are great tools to utilize in this process, but companies must also look inwardly at what they are doing to address culture and engagement. These incentives, more than cash, are often given as reasons for a leader’s departure.
As a trusted business partner, we are pleased to act as a sounding board for you if your company is dealing with a gap in leadership talent. If you would like to have a deeper discussion around any of these or other best practices we learned in 2021, please don’t hesitate to reach out to us.
McDermott + Bull interim executives allow our clients to address their leadership gaps and critical projects nimbly. Typically, we can turn around options to our clients in 48-72 hours. As we embark on the new year, know we are here to support you when you need us.
About the Author
Mark serves as a Managing Director for McDermott + Bull Interim Leaders, where he develops relationships with companies addressing transition, organizational shifts, and transformations. He partners closely with clients who require on-demand consulting resources to bridge leadership gaps and drive their business forward. He has experience working with growth and enterprise-level companies across many industries, as well as depth in functional areas such as finance, accounting, compliance, and human resources.