Implications of the Global Executive Talent Shortage
The notion of a talent shortage is nothing new. We’ve seen the headlines pop up across our news apps over the last few years. Research from AESC and The Conference Board even revealed one of the top five external issues impacting business is the labor shortage.
In addition, our research has consistently identified attracting and retaining talent as the leading internal business issue globally. The factors driving a need for executive hiring include:
- The need for new skills and capabilities and even new leadership roles
- Leaders that can adapt to changing business models
- Leaders with expertise in expanding into new lines of business
- Leaders to replace an aging leadership team
- Recognition of diversity and inclusion
The challenge is not just a typical labor shortage, but a shortage of top leadership talent with specialized skills and competencies, such as adaptability, agility, resilience and an overarching, demonstrated ability to lead change. There is also demand for new and emerging roles, such as those focused on sustainability, climate risk, cyber risk, and competencies such as a track record of digital transformation success, the ability to identify new business opportunities through artificial intelligence while managing risks, leadership in diversity, equity and inclusion, a focus on innovation and more.
The shortage of executive talent is amplified by similar business needs across many organizations worldwide; add the demand for new roles where 20 years or more of relevant experience is just not feasible and we find ourselves in a “candidate’s market.” Like in real estate, when we have a “buyer’s market,” the candidates have greater leverage. Top talent often have many opportunities and they are very selective. They look for more than the best compensation offer.
What Does the Candidate’s Market Really Mean for Organizations?
In a candidate’s market, the candidates, especially those with highly sought-after skills and competencies, have the power. They know they are in demand, and they have choices. Here’s what that means for organizations:
Competition: The talent shortage and candidate’s market heighten the competition for top talent. Executive candidates with specific, hard-to-find competencies and skill sets are in high demand and may receive offers from several companies looking to fill vacant positions. This means that your organization will need to position itself as the most attractive option by providing a competitive offer and a strong employee value proposition.
Talent Expectations: In many cases, candidates expect and ask for more than they normally would in terms of compensation, benefits, and flexibility. The post-pandemic environment has changed expectations around mobility and flexibility. In today’s world, many employers seek leaders interested in returning to the office while leading candidates may prefer hybrid or remote options. Candidates also expect professional development and opportunities for advancement. To attain the leadership talent you’re looking for, you may need to compromise with the desired candidate, or find creative ways to fulfill their expectations.
Culture Counts: Recent AESC research shows that candidates are paying attention to a prospective employer’s leadership, culture, and purpose. Candidates want to join organizations that are aligned with their own values and purpose. After all, they are leaders and want to be a part of a leadership team with shared interests.
Skills & Experience Gap: Between new competencies, new roles, and a growing shortage of diverse talent, your organization may need to get creative in finding alternative solutions to fill positions. This may include thinking outside the box when looking at potential candidates, prioritizing transferrable skills or providing additional training and support to the successful candidate.
Candidate Hesitancy: The talent shortage and candidate’s market are also amplified by global economic uncertainty. Candidates may be reticent to make a move, meaning it may take additional persuading or a longer-term courtship to make them consider your opportunity. In some cases, candidates are taking extra time to consider an offer, slowing down the hiring process and leaving positions vacant for longer periods of time.
Extended Time To Fill Positions: In addition to candidate hesitancy causing delays, the lack of qualified executive candidates will also prolong the time to fill. The executive search process is already a rigorous process with multiple steps. Adding in the shortage and lack of viable candidates in turn makes the process take even more time. During times of shortage, it may take longer to identify, engage, and secure the right candidate, which can cause delays in decision-making and hinder long-term objectives.
Succession Planning Impact: A shortage of top executive talent creates an important opportunity to strengthen the focus on succession planning, assess a diverse pool of next leaders, and create innovative development opportunities to accelerate growth. All of this strengthens your organization and complements your focus on external recruiting of top talent.
Decision-Making Limitations: Without the right leaders in place, your organization may face challenges in meeting your goals, driving innovation, implementing new strategies, and navigating the complex business landscape.
How Can Organizations Navigate the Talent Shortage?
How can your organization find and place top talent into leadership positions in a candidate’s market during a global talent shortage? Retain an executive search firm with the right expertise for your needs. Executive search firms have experience finding creative solutions to your talent and leadership challenges.
Executive search firms take the time to learn about your organization, your company’s goals, culture, and the open positions to act as a brand ambassador when speaking to potential candidates about the role. They have access to a deep network of passive candidates. Even if those candidates may be hesitant to entertain an offer, a quality search firm has the unique expertise and skill set to establish a relationship with a hard-to-reach candidate, build the connection, make the offer, negotiate terms, and, finally, secure a signed offer letter.
Prioritize hiring an AESC member firm as they are in the best position to solve even the most challenging talent and leadership assignments. They leverage their industry, function, and/or market expertise to stand out from the competition as high-quality, reputable firms that can be trusted with your most important assignments.
AESC members are firms that have met the profession’s highest quality standards and are in the best position to identify and persuade leaders with hard-to-find skills and competencies. Executive search firms play a pivotal role in solving their clients’ talent shortage and candidate’s market issues by reaching passive candidates, finding creative solutions, and having deep connections and diverse networks. They serve as your trusted talent and leadership advisor, going beyond just one assignment to understand your top talent and leadership challenges, including attracting and retaining diverse talent, succession planning, creating a culture of inclusion and innovation, and more.
To learn more about how AESC members are primed to find much-needed talent in times of short supply, subscribe to our SmartBrief newsletter for the latest in executive search and leadership consulting.