Executive Job Market Trends Following Q3 2022

Executive Job Market Trends Following Q3 2022

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Most of Q3 encompassed the quieter summer months, during which time many professionals switched off and enjoyed a summer reset and developments in the executive job market were largely uneventful. But as the number of Out of Office replies began to dwindle, marketplace difficulties ramped up. The end of Q3 saw the appointment of a new Prime Minister, the passing of Britain’s longest reigning monarch, record-breaking inflation figures, hiring freezes across once-booming industries, an increasing number of insolvencies and corporate restructures, a major fall in the value of the pound, and the introduction of a mini budget with major implications for UK businesses and individuals, and the executive job market as a whole. And that was just September, leading us into Q4 with much to contend with.

This combination of factors has certainly created a challenging set of circumstances for businesses and executives end the year on. Many will be looking to take whatever action they can to close Q4 strong and position themselves well for the new year. As the final quarter begins, we are looking back on the executive job market trends that emerged at the end of Q3 and highlighting the key considerations and skills for navigating the final three months of 2022 and beyond.

Market Snapshot

The Office for National Statistics (ONS) September 2022 Labour Market Overview revealed that the number of payrolled employees in the UK had risen to a record 29.7 million in August 2022. This constitutes a monthly increase of 71,000. Unemployment reached its lowest rate since July 1974 at a mere 3.6%. Additionally, the number of job vacancies in June to August of this year decreased to 1.26 million, which is the largest quarterly decrease since 2020.

September was a busy month economically. At the time of the publication of this blog, the ONS have not yet released their figures, but the Recruitment and Employment Confederation (REC)’s Labour Market Tracker lends some insight. The tracker found that in the week of 19-25 September, the number of active job adverts across the UK rested at 1.45 million, which is lower than any point since the pandemic began but is high when compared to pre-pandemic levels. This marks a significant drop in job postings since the beginning of July, when there were 214,564 new positions listed weekly compared to 143,000 currently. It appears that the market is experiencing an autumn chill as we enter Q4, and likely foreshadows just how impactful the circumstances created in September will be on activity for the rest of this year.

It is likely that this drop in vacancies can be partially attributed to companies slowing down or freezing their recruitment activity. If Q3 taught us anything, it’s that no industry is truly immune to the impacts of a challenging macroeconomic climate. Tech—which had been experiencing something of a ‘gold rush’ in recent years and saw major gains during the pandemic—has slowed down on hiring. In Q3, both Meta and Google implemented hiring freezes while Microsoft made hundreds of staff redundant. Similarly, every subsector of Financial Services experienced a major reverse in hiring activity in Q3, as evidenced in our City Financial Services Job Market Indexes for July/August and August/September 2022.

A fall in recruitment activity is characteristic of periods of recession as businesses tighten up their expenditure and reallocate resources. While that often means less available budget for new hires, it also means a lack of budget for bonuses or salary increases. Despite the ONS data indicating a growth in average pay for workers (including bonuses) between May and July 2022, pay has not kept pace with the high costs of living and inflation rates that are set to rise even higher through the end of the year. Once these were factored in, the ONS found that real pay actually dropped 2.6% between May and July. The pay figures will likely influence the Bank of England to continue hiking interest rates early in Q4, which will in turn cause businesses to become even more conscious of their expenditures through the end of the year. Switching to a new company will continue to be the best option for senior executives looking to increase their financial reward.

Key Considerations

• Low Hiring Activity Does Not Equal Zero Opportunity: Periods of boom and bust are not abnormal for the executive job market, but they usually tend to hit different industries at different times depending on circumstances in the market at large. For example, businesses in industries like Hospitality struggled gravely during lockdown, while others industries like Tech thrived in the new hybrid and remote work environment. In times of recession or near-recession, challenges seem to impact every industry and sector simultaneously, which is what we are experiencing now. When this happens, businesses of all sizes and sectors tend to proceed with caution. It seems as though hiring is halting en masse as big players announce their plans and strategy. However, businesses proceeding with caution does not equate to total market inactivity. There is still opportunity in the market; there just may be less of it than there historically has been.
• The Need for Leadership: Senior executives in leadership roles, or those aspiring to them, may find that their skills and capabilities are under more scrutiny and in higher demand than ever before. As restructuring takes place, leaders will be expected to deliver results in a high-pressure environment. This means that on one side of the coin, leaders will need to be on their A game to drive impact and navigate their team in a direction that best serves the organisation at present and in the future. On the other, it means that some organisations will be looking to recruit those with the necessary skills for delivering results. As we stated in our recent blog about taking control of your career during restructuring: it is time to step up or step aside.
• Navigating a Candidate-Driven Market: Competition is undoubtedly fierce in the senior market where everyone seems to be on a similar level in terms of background, experience, or credibility. This is where skills become paramount, as these are often what differentiates strong candidates from the singular ‘right’ candidate and is what usually turns the tables in favour of the executive. While there may be an excellent pool of global senior talent available at any given moment, candidates with all the right future-ready skills and capabilities are scarcer. Therefore, competition amongst businesses to secure this talent will be fierce, and the power is in the hands of the executive to command their desired compensation, working arrangements, equity, or work-life balance conditions. This is an incredibly beneficial position for the executive to be in but is only possible if the right skills and capabilities are possessed.

Key Skills

The question is therefore what capabilities will employers value most as we wrap up 2022 and begin planning for 2023? Here are the skills that senior executives should be developing and championing to differentiate themselves in the executive job market and drive business value in the foreseeable future:

• Communication: You will have many stakeholders to manage during this time. Senior executives may have to answer to the chairman, the board, and shareholders in addition to their staff and customers. Being able to navigate these audiences and tailor messages accordingly will prove highly valuable. Q4 is on course to be highly challenging economically, which will undoubtedly draw questions from your teams, your managers, or those with equity stakes regarding the direction of the organisation and its plans for overcoming these difficulties. You need to be able to share the right information with the right audiences in the right way and at the right time. These conversations might prove to be challenging, and so you may benefit from the advice shared here.
• Digital Skills: It is becoming increasingly clear that for most businesses to push forward, generate profit, and set the business up for future success, they must embrace technology. The pandemic was a wakeup call for many, and the ongoing disruption continues to solidify the need for digital transformation. You do not need to learn how to code but should aim to educate yourself on the tools and technologies available and how they may potentially benefit your business or industry. Artificial Intelligence is a strong technology to focus on, and proficiency in this area is in high demand. However, transformation is ongoing and fast moving. Many businesses are already upgrading or swapping out some of the tools and solutions they adopted only last year. It is essential to keep a finger on the pulse of what is happening now, and where technology is headed.
• Customer Centricity: This growth in digital has been underscored by a societal shift in habits. Essentially, your customers’ habits have changed, and so the business needs to change alongside them. This is true of all activity that businesses will conduct through the end of the year and beyond. Just as businesses will be hit by challenging economic conditions, so will their customers. Priorities will shift and purse strings will tighten. Businesses and their leaders need to consider their customers’ shifting needs and circumstances and build their end-of-2022 and early 2023 strategies around them. You need to become a champion for your customers in every conversation, every brainstorm, and every decision-making process. Your customers hold the key to the future of your organisation, and if you are not catering to them, you risk losing control.
• Agility: Of course, none of us know what exactly the final three months of 2022 may hold. September alone demonstrated just how much can happen in a short period of time. Those best positioned for success adapt in an agile way to changes as they happen instead of allowing these changes to stop them in their tracks. Your ability to think ahead and prepare for all possible scenarios will be a major asset for any employer and will allow you to continually deliver impact.

The end of the year will undoubtedly bring about many challenges for executives to contend with, and while much remains to be seen with Q4, whatever happens in these next three months will set the tone for 2023. Senior executives should be focusing in on their skills either to champion a career change or to create valuable impacts for their current organisation.

To learn more about our executive career coaching and executive outplacement services, get in touch with our team on +44 (0) 20 3746 2960.