As we enter the halfway mark of 2022, we reflect on executive job market dynamics that are intensifying the strategic efforts needed for those anticipating or undergoing an executive job search.
At the beginning of the quarter, we saw the end of COVID-19 restrictions and hybrid models starting to become the norm. However, we are now seeing many organisation wavering on their pledges to make hybrid work the norm and calling staff back to the office full time, causing a greater level of uncertainty and misalignment between staff and business priorities and a continuation of the ‘Great Resignation.’
The war in Ukraine, which initially led to unprecedent fuel shortages worldwide, has continued to cause disruption to supply chains. We’ve seen new highs in global inflation, interest rates, and costs of living around the world, leading to economic disruption for both businesses and consumers.
As we enter the summer of 2022, here are factors you need to consider across the executive job market if you are considering a career change or job move.
The post pandemic economic recovery many had hoped for at the start of the new year hasn’t quite materialised. This is evidenced in the latest edition of the Office for National Statistics (ONS)’s Labour Force Survey (LFS) released on 14 June.
The UK employment rate increased by 0.2 percentage points to 75.6%, while unemployment fell 0.2 points to 3.8%. The number of full-time employees increased to a record high, with the timeliest estimate of payrolled employees reflecting an unprecedented 29.6 million. Data from Bullhorn shows that contractor jobs increased by 34% between May 2021 and May 2022, while permanent roles increased 25% year-on-year. Looking at month-on-month comparisons, permanent roles increased by 16% between April and May 2022 while contract roles were up by 19% during the same period. The simultaneous rise of the employment rate and fall of the unemployment rate is good news, but another record-breaking figure indicates that the UK’s growth prospects will sustain continued damage.
In March to May 2022, the number of UK job vacancies rose to a new record of 1,300,000. For the first time in our recorded history, we have more jobs available than we have people available to fill them, which paints an interesting picture of the current market. The LFS data from May shows that total job-to-job moves increased to a record high of 994,000 during this reporting period, driven by resignations rather than dismissals. In the June LFS, reports of redundancies in the period decreased to a record low of 2.0 per thousand employees. This indicates that we are in a workers’ market, meaning that those who choose to leave their roles will have a decent chance of finding another.
Most of the movement from the Great Resignation is occurring at entry and mid level in most organisations, but that’s not to say that senior executives are not impacted. Every few years, the ONS releases data from their population surveys that give a rough idea of how many UK adults possess specific roles at the time of survey. In 2021, the number of adults aged 16+ acting as Managers, Directors and Senior Officials stood at a total of 3,365,100, accounting for 10.5% of the total UK workforce. In 2020, this figure was 3,657,400 (11.3%), and 3,684,500 pre-pandemic in 2019. It is clear that COVID-19’s challenges had a major impact on the executive market, reducing the roles available as many businesses downsized their teams or collapsed.
Because so many of senior roles are never advertised, it is difficult to pinpoint just how many of these opportunities there are available in the market at any given time. Browsing LinkedIn or an executive job search site might provide insight into what roles are publicly listed but may not be a full representation of what opportunities are out there. When looking to transition career, it would therefore be remiss to underestimate how many roles are secured through word-of-mouth, making it an imperative to ensure you are maintaining a strong network and making yourself visible to the right people.
So, with job vacancies at an all-time high, an unemployment rate below 4%, and fierce competition for workers in the executive job market, where do we go from here? What factors should those looking to expand their teams or undergo an executive job search be most aware of?
Now more than ever, businesses need strong leaders of the future with the right capabilities to navigate them through these more challenging times. In PwC’s Pulse Survey, 77% of executives said hiring and retaining talent is their most critical growth driver in 2022. However, businesses are struggling to recruit the right talent for these critical roles. In West Monroe’s Quarterly Executive Poll for Q2 2022, 74% of respondents reported that executive leadership roles are harder to fill than they were last year. Therefore, executives possessing in-demand skillsets will be at a major competitive advantage in the job market.
Tech skills remain top of the list as organisations double down on digital transformation in order to drive growth in current economic conditions. Many companies will turn to automation, AI and other advanced technologies to navigate this environment with greater agility, mitigate the impacts of talent shortages, and build smarter and more resilient supply chains. Executives who are well equipped to lead or contribute to transformation projects will be of high value to potential employers.
‘Growth’ will be a major keyword throughout the second half of 2022 as economic stagnation takes hold. Executives with experience in new business development, planning, operations, sales management, financial capabilities and new business model creation possess some of the most sought-after specialisations today. When in the process of seeking or interviewing for a new role, be sure you can demonstrate concrete examples of delivering results and driving business forward.
On top of these business-focused capabilities, soft skills remain a major focus in the hybrid working world. High emotional intelligence and effective communication are critical skills needed to work with staff spread out across locations, as are elements such as motivation and accountability. But beyond that, businesses need leaders with strong people skills to help with overall talent retention and attraction. Talent has become business’s most valuable resources, and organisations need senior executives who can effectively empathise, communicate, and inspire. Demonstrating one’s ability to effectively lead, motivate, and deliver results will be of major benefit to any executive looking to take on a leadership role.
Businesses cannot afford to lose valuable staff, but the prediction of an incoming recession has reprioritised salary expectations and requirements to new levels. The most recent LFS reflects the largest fall in UK staff’s real wages in nearly two decades, with growth in total pay at just 0.4% and regular pay at negative 2.2% after adjusting for inflation. This is likely to have a major influence on the jobs market, as a recession will impact the moves employers are willing to make and potentially push more executives into transition.
It is clear that employees of all levels will be looking for higher wages in order to offset rising costs of living, but that does not appear to be the only benefit driving moves in the career market. According to Korn Ferry, flexibility, career prospects, belonging, social issues, and purpose are all amongst the priorities driving professionals when exploring a new role. If unwilling to provide these elements, employers will continue to struggle with attracting and retaining their top talent and senior executives may have difficulties finding and securing a new role that satisfies their priorities.
CIPD’s Labour Market Outlook Spring 2022 helps provide insight from employers into where the biggest gaps and opportunities can be found in the marketplace. While there are a record number of vacancies available in the UK market overall, some industries continue to thrive in their recruitment of talent. Net employment intentions are particularly high in areas such as construction (+54), information and communication (+53), hospitality/arts and entertainment (+47) and business services (+47), where employers intend to onboard rather than downsize.
Manufacturing is lower down on CIPD’s list with a net of only +24. However, Make UK’s Manufacturing Outlooks report for Q1 2022 was optimistic for the industry, predicting a 30% growth in employment and investment in the three months of Q2. Vacancies are high in this industry, but talent is hard to come by. While the all-UK vacancy rate grew 65%
between March 2020 and 2022, the manufacturing vacancy rate grew by a staggering 91% in that same period despite the manufacturing industry offering 12% higher wages on average than the wider economy. There are a multitude of factors at play that are making it far more challenging for manufacturers to access labour, such as difficulty sourcing labour from the EU following Brexit, an expensive labour market, changing workforce attitudes towards flexible working, and reduced hours or early retirement. Executives looking to make moves in this sector will likely have a fair share of challenges to overcome to innovate, deliver to customer expectations and realise growth potential.
Our monthly City Financial Services Job Market Indexes (found here) help to shed some light on the situation in the UK’s financial services sector. In Q2 thus far, we have seen increases in overall hiring demand across financial services, rising 3% between March and April and 1% between April and May. The biggest gains have been found in Banking & Markets, Investment Management, and Information Services. Wealth & Private Banking and Fintech both decreased in demand between March and May, with the latter’s decline potentially linked to a wider malaise in tech stocks and the start-Up market though it is too early to tell. Overall, this sector has had less movement than experienced to date, with our overall index up a healthy 70% year on year when compared to May 2021.
That said, even though some sectors are growing, employers across practically all industries have roles available that they are struggling to fill. According to CIPD’s report, 45% employers overall reporting hard-to-fill vacancies. These types of vacancies are most common in healthcare (54%), the voluntary sector (49%), and education (49%). But even those who are looking to grow have hard roles to fill, with 46.9% of employers in construction, 45% in hospitality/arts and entertainment, 45% in business services, and 37% in finance and insurance reporting having hard-to-fill vacancies.
As we learned from the LFS this month, there are simply more jobs in the marketplace than there are workers to fill them. The vacancies deemed ‘hard-to-fill’ are a bit deeper-rooted than a general lack of available staff, caused more by lack of skills, fierce competition for necessary talent, or an unwillingness to provide the types of benefits and work-life elements todays professionals have come to prioritise. Executives seeking to obtain one of these more difficult vacancies should consider what skills and experience they can bring to the table, and whether or not they are willing to be flexible with their ‘must-haves’ at all.
The height of the pandemic was an interesting and challenging period for the jobs market, but the first half of this year has proven that the era immediately post-pandemic will be no less tumultuous. With how unpredictable these initial 6 months of 2022 have been, it is impossible to forecast what shape the rest of the year may take. However, there is no need to put career plans on hold. Executives in transition should continue to take the time to assess their capabilities, strengths, and skills to best position themselves as aligned and relevant to market needs and as sought after leaders of the future.
If you are looking for personalised help to make a successful executive career change, Rialto can help. Alternatively, to gain further insights on areas to focus on to secure your next move, complete our career growth index here.
It’s hard to believe that we are fast approaching the final quarter of 2021. As the ‘Out of Office’ replies…
2020 proved a challenging period to make a career move. Many executives choosing to put their transition plans on hold…
It is hard to believe that we are only entering the third month of 2022 given how much has transpired…
