The “Perfect Storm” is Here – How to Overcome the Worst Talent Drought in Living History.
The executive recruitment market is as dynamic as I have ever seen and organisations and ‘C’ suite leaders across Australia are suffering bitter disappointment, either at being unable to find the right talent, or losing quality candidates during the search process. The forces of investment and transformation have combined to create a “perfect storm” which has led to the greatest demand for talent in living history.
Here are five factors that underpin the current talent drought.
Stimulus: The Federal Government is gradually spending $311bn on COVID stimulus. The stimulus is slowly making its way through the economy and while it’s nowhere near proportional to the estimated losses, for the time being it’s filling the balance sheet and giving an illusion of financial stability.
Investment: After several decades scrambling for capital, local startups are finally obtaining serious investment, affording them an opportunity to expand. This has fuelled a mass exodus from large corporates, as many employees seek faster-paced environments and to expand their earning potential via equity options. There’s also a lot of “lazy money” looking for a home, as traditional investment vehicles yield lower returns and have lost some of their appeal, when compared to the sharp share price increases of rapidly growing startups.
Lack of International Talent: The international talent taps have been turned off and as a result, the Australian executive talent market is much more reliant on home grown leaders. This has been exacerbated by domestic border closures and we’ve noticed a distinct rise in the number of companies choosing to hire remote working employees. The notion of living in the country, or state in which the head office of the organisation is based is becoming an antiquated notion as more and more companies adopt this approach.
Talent Investment: Poor succession planning and a lack of investment in the development of talent has led to a flattening of the skill curve. It’s no longer enough to be “the best in Australia” when you are competing on a global scale and when a top performer leaves an organisation, it can prove difficult, if not impossible, to replace them.
Crisis = Change: Almost every business we work with is in a state of immediate, urgent change. For most, its positive change, led by innovation and growth opportunities, for others it’s “do (now) or die”, as they face oblivion. Customers are changing their habits faster than ever before and companies are racing to keep up with their demands. New and exciting roles are being created, or old roles are being re-cut to suit new ways of working.
Get the Percentages Working in Your Favour.
In my experience, 80% of clients indicate that that they’d like to hire a new executive within three to four weeks from briefing an executive search advisor. 10% believe they will hire within four to six weeks and another 10% believe it will take them six to twelve weeks. The average time to hire an executive is around eight to twelve weeks. This means that at least 90% of the clients we speak with will be facing a longer process than they originally anticipated. Speed is not the metric you should measure your process by. The quality of the outcome is the only metric that matters.
It will take longer than you think to find the right person. Accept that and move on.
In order to get the percentages working in your favour when it comes to hiring, you need to determine what your negotiables are. What can you do or offer to improve your success rate and secure the best possible talent for the role? What can you control?
Salary: The laws of basic economics state that low supply plus high demand equals a rise in price. Don’t delude yourself that money isn’t an important factor when executives switch roles. Prepare to pay 20-30% above your existing expectations. I understand that you don’t WANT to, but you may HAVE to. I’ve heard clients say when replacing an existing employee, “We need to get someone in who’s going to do a better job than the incumbent”, however the salary on offer is the same as the salary they are currently paying (or worse… they want to pay LESS). I’m sure you can see how that statement completely defies logic.
Expectations: “I know we are chasing a unicorn” is not a phrase you want to joke about these days when appointing executives (yes… I’ve heard that one many times). You need to accept that there’s no such thing as a “perfect person”. Shape a brief that gives you 20–30% variance in skill and salary than your original brief. The one thing you shouldn’t, and frankly, don’t need to negotiate on are: adaptability (growth mindset), ambition, potential, work ethic and commercial ability. Hiring from within your own industry, while understandable, is more of a “hire for comfort” approach, which only serves to highlight your own inability to identify transferable skills.
Speed: Given the pace with which this market is currently moving, you can no longer afford to drag out a lengthy process. Top talent is getting snapped up quickly, often within weeks or days (yes, days!) of their first interview. In this market, you don’t have the luxury of time on your side. Open your diaries early and ask yourself, “How many people do I REALLY need to get involved in this hiring process?” “Do I really need EVERYONE’S buy in?” Ensure that you don’t let annual leave or other “unforeseen” slowdowns interrupt your process. When you see the right person for the role, hire them, don’t ask for another three similar people to put them up against. I guarantee that you’ll lose the one you want while waiting around for someone better – someone who may never arrive. Back your instincts. You know a superstar when you see one!
Side Note: Move Quickly, but Don’t Cut Corners
Please keep in mind that while you are feeling pressure to hire quickly, you need to ensure that you are making the process enjoyable and engaging for the people you are introducing to your business. I’ve seen many clients lose candidates as a result of rushing the processes. Some have asked to conduct psychometric testing before they’ve even met them because it suited the client’s schedule. Ask yourself, “What kind of introduction is that to a process?” “How would you feel having to complete hours of testing for a person you’ve never met, for a job that you aren’t even sure you want yet?”
Make sure you are over communicating with the people you are engaging with and that you are checking in to make sure they have all the information they require to go to the next step. Give them detailed and constructive feedback in a timely manner.
If you can negotiate on all three of the above points, I guarantee that you’ll achieve the outcome you are after. If you can negotiate on just one, then it will dramatically improve your chances of filling your role. Your ability to adapt your approach and evolve with the breakneck market we’re currently in will determine your ability to secure a successful appointment.