Executive Outlook: Executive Jobs Market Q3 Update & Q4 Predictions
Filter tag: Change Management and Executive Outplacement, Leadership Capability, Strategies for Growth
Even in the most ideal of economic conditions, Q3 is a slow time of year for both businesses and the jobs market. After powering through the first half of the year, many use this time to take a break and recharge before returning to finish out the year strong. With July and August typically characterised by slower activity and Out-of-Office replies, September usually sees a surge in activity as teams return refreshed and businesses begin to structure and enact their plans for rounding out the year. In 2023, the expected surge appears still to come.
Why might that be, and what does it mean for leaders and their organisations, as well as executives planning a career move?
Reflecting on the current market status can help to better prepare for what lies ahead. This is critically valuable as we approach what, for many, is a high-stakes Q4. Our experts offer insights into the current state of the executive job market and the macro business landscape, highlighting trends that will shape and providing advice for navigating these conditions successfully.
Jobs Market Snapshot
Although a complete view of Q3 data awaits the release of the Office of National Statistics’ (ONS) October report, their September report and ongoing market activity provide substantial insights into our current position and potential future.
Their latest report found that UK unemployment rose by 159,000 in the last quarter, moving the jobless total up to 1.464 million and setting the unemployment rate at 4.3%. This is the highest this figure has been since Q3 2021 and exceeds the predicted 4.1% the Bank of England had previously anticipated for the whole of Q3 2023. Employment also dropped by a greater-than-expected total of 207,000 in this reporting period, with 182,000 of those drops happening in London alone. This is the biggest such fall since the three months to October 2020.
The current market is characterised by more people leaving employment and less opportunities available, as this report reflects. In June to August 2023, the estimated number of vacancies fell by 64,000 to 989,000. This quarter is the 14th consecutive period in which a fall has happened.
Total pay (including bonuses) saw growth for the period rise to 8.5% in annual terms, the highest level seen in more than 20 years and excluding the pandemic when furlough distorted the data. Regular pay (which excludes bonuses) grew by 7.8%, its highest annual growth rate since comparable records began in 2001. The latest Consumer Price Index (CPI) data shows that inflation slowed for a third consecutive month to 6.7% in August, its lowest level in 18 months, indicating that wages are rising faster than prices again after a long squeeze from last year’s inflation surge and the record high of 11.1% we saw in October 2022. This news surely came as a relief to many, but could also increase the pressure placed on businesses if interest rates rise again causing further challenges in the market towards the end of the year.
Key Career Transition Trends
As we move into Autumn, it appears as though we will be sailing into Q4 2023 against strong headwinds. However, there are glimpses of optimism and opportunity to be found. These are the key labour trends our experts predict will shape activity for the remainder of the year:
- Further Economically Driven Decision-Making: Typically, strong wage growth indicates a strong economy, but the UK’s rapidly rising unemployment rates and falls in opportunity suggest the opposite. Thankfully, the Bank of England chose to keep interest rates at 5.25%, defying predictions of another rate hike and ending a run of 14 straight increases. This raises the prospect that this cycle of rate increases may have peaked, but there is always the chance that they could spike again. However, for many businesses, the impact is already being felt.
A number of businesses across industries are engaged in merger discussions or restructuring to survive, while others have unfortunately fallen into administration. It is very likely we will see more businesses fold under the pressure or consider downsizing, which will further disrupt the market. Individuals in transition or considering a career transition should prepare themselves for a generally cooler market than usual through the end of the year despite the positive news from the BoE.
- Pockets of Opportunity: Some industries are feeling more optimistic than others. Those erring on the side of caution are those more likely to have borrowed to survive or stay competitive following the pandemic, as they will be most affected by interest rate hikes, high costs of living, and disrupted markets. British Chambers of Commerce research shows record numbers of organisations reporting recruitment difficulties, particularly in the hospitality, retail, and manufacturing sectors. Make UK’s own data supports these outlooks for manufacturing, with the trade body predicting output will fall by 0.5% this year and cause recruitment plans to weaken significantly due to a slowdown in orders from domestic and overseas customers. According to the latest CIPD Labour Market Outlook report, the net employment balance in public administration and the rest of the public sector has fallen from +15 in the previous quarter to just +2 in summer 2023, with 17% of employers in this sector planning to decrease their staff levels before the end of the year. Their research also found that Education also has a weak employment outlook with 13% of employers in this sector planning to decrease staff levels in Q4.
But there are still many opportunities to be found according to research from Manpower Group. Their Q4 Employment Outlook Survey data found that 44% of global employers anticipate an increase in hiring in the quarter, while 14% anticipate a decrease and a further 38% anticipate no change. This is very similar to the figures when zooming in on the UK alone, with increases of 42%, 16%, and 39% respectively. Across both the global and UK data, the most opportunity is likely to be found in Financial Services & Real Estate, IT, and Healthcare. In the UK, the outlooks for Transportation & Automotive fare better than they do globally, but global outlooks for Communications Services are much better worldwide than they are in the UK. So while the market is certainly slower and smaller than it was this time last year, there will potentially be some upturn as we round out the year.
- Strong Focus on Skills: While there may be less opportunities in the market overall, many employers are struggling to fill the gaps they have. The Manpower Group report found that globally 77% of employers across industries say they are struggling to find talent with the skills they need, while in the UK that figure rises to 80% of employers. Staying zoomed in on the UK, in every industry apart from Consumer Goods & Services and Communications Services, the number of employers who reported having this issue was 80% or higher. Energy and Utilities (88%) and Healthcare (83%) employers are struggling the most.
In a market where there is certainly no shortage of talent, it is interesting to see such a high volume of employers across industries reporting struggles. For senior executives looking to make a career transition in Q4, there are a few key things to note here. We are seeing a shift away from a focus on experience and tenure to a focus on skills and capabilities. Despite it being a crowded marketplace, possessing those desired skills may increase one’s chance of success. The key is figuring out how to leverage and communicate those capabilities to differentiate oneself from the crowd. More on that later.
- ‘Quiet Quitting’ and RTO Plans: For the past several years, we have been tracking ‘The Great Resignation’ trend in which the job market power was in the hands of the talent. As conditions have continued to be volatile, businesses have reigned in and fewer opportunities have become available, with power changing hands back to employers slowing the resignation trend. Those desiring a career transition are not unaware of the slower job market conditions, and it is now their turn to err on the side of caution. As a result, we are seeing less people leaving their jobs outright and instead staying put, pulling back and not performing at optimal levels due to their disengagement. This trend, dubbed ‘quiet quitting,’ has created less job-to-job movement in the market which in turn has contributed to the low number of opportunities available. Meanwhile, other employers are doubling down on their return-to-office (RTO) plans, causing major shakeups for hybrid and remote workers. During the pandemic, organisations were able to add valuable talent to their teams by expanding their workforce from global candidate pools thanks to remote working arrangements. Others who may have otherwise left the organisation due to familial obligations or geographic restraints have been able to stay in their roles under more flexible working models as well. Some businesses’ strict RTO strategies put them at risk of losing valuable talent or putting off potentially valuable candidates.
This is a growing problem that many employers will need to address in Q4, so expect this to take a few forms. Some employers will shift focus from recruitment to retention, focusing on getting their existing talent back on track rather than bringing in new executives. This may include rethinking compensation and altering RTO plans to improve satisfaction. Others may choose to cull underperformers or those refusing to comply with RTO rules, injecting more competition into a crowded job search market. Others may recruit new leadership to help steer the business back on track. Those who make cuts will have to recruit to replace what has been lost, but this may raise red flags for executives in the market. If a business has lost a lot of talent to quiet quitting or RTO plans, you may need to consider if the organisation’s operating model and culture aligns to your own personal search criteria or career goals.
- Accelerating AI Adoption: We would be remiss to make a trends list without the inclusion of artificial intelligence and emerging technologies, which continue to be the single biggest disruptor to the business landscape. We are seeing many businesses announce restructuring and redundancy plans with AI cited as the catalyst, while others flounder in knowing how to upskill their staff and harness the potential of this technology. As we mentioned in our April Executive Outlooks report, there is no turning back now when it comes to AI. If anything, we are deeper into it now than we were back when that report was published. Generative AI and other forms of artificial intelligence continue to evolve and expand, with new updates seemingly every day. Organisations who find new ways to harness AI’s power to benefit their business, and the expectations placed on their people will change as a result. At the senior level, it is unlikely that your role will be replaced by or have extensive direct interaction with AI, but it is important that you understand its overall business value and who as well as how your teams will need to use it in their daily activities. Organisations will need leaders who are primed to lead their adoption efforts and guide the rest of the team through the changes. Prepare and educate yourself for this shift to increase your value in the future of work.
Executive Career Transition Advice
The trends we are seeing are bound to create ongoing business challenges through the end of 2023 and the start of 2024. Rialto Executive Coaches advise the following for those navigating an executive transition in these conditions successfully:
- Strengthen Your Skills: As indicated by the trends, employers are focusing much more heavily on skills than experience. That’s not to say that your experience cannot be valuable, but when undergoing a transition in these conditions our experts suggest emphasising how your experience translates into valuable capabilities. Carry out research into what the in-demand skills are for your industry. Tap into your network to gain insight. If you already possess the necessary skills, assess whether you are communicating them properly or strategise how you can more effectively structure your value proposition to strengthen your search efforts. If you lack the right skills or they could use improvement, focus on upskilling in Q4 so that you can enter the market with the best possible chances in the new year. As shared in our mid-year market update, the World Economic Forum listed a number of skills on the rise in their 2023 Future of Jobs Report, for individuals to benchmark against including analytical thinking, creative thinking, resilience, flexibility and agility. Focus on how you can demonstrate and communicate these skills to appear more valuable to potential employers.
For businesses, the advice from our previous Executive Outlooks updates still apply. If you’re considering business restructuring or cost-cutting measures, it’s crucial to avoid jeopardising your ability to steer the company through future chapters due to poor planning and skill shortages. If recruiting isn’t feasible, prioritise upskilling existing teams to ensure they possess the required competencies. Additionally, concentrate on employee satisfaction and retention to maintain optimal performance from your talent pool.
- Structure Your Strategy: A cooled-down jobs market may be stressful and a bit daunting if you are in transition, but the slower conditions offer an opportunity to shift your focus to your strategy. In a difficult marketplace such as this, you need to have clear objectives, priorities, and a plan of action. What employers do you want to target in your search, and who are the key decision-makers you need to influence? What exactly are you looking for in your next role, and what do you bring to the table? The slowdown in activity makes it possible to devote time to getting this right so that when things eventually do pick up, you will be ready. Working with an expert advisor such as our Rialto Executive Career Coaches through a tailored, 1-1 career coaching programme can help to increase your effectiveness and ensure your strategy and positioning meets market needs.
- Strengthen Your Personal Digital Brand: Building your online persona needs to be a major element of your strategy and is a major element of all Rialto Executive transition and Executive coaching programmes. Today’s job search experience skews heavily digital, so it is crucial that you are leveraging all the available tools to make the right impression when found online. At the senior level, your personal brand is crucial for securing a role via the hidden market both online and off. This remains the best way for senior executives to find and secure opportunities in such a tight market. What might an executive recruiter, a valuable contact, or a potential employer see when visiting your profile? Would they walk away with a strong understanding of who you are as a professional, what you are capable of, or how you might be able to add value to their organisation? If not, focus on optimising your online presence in Q4. Make sure your skills and experience are clear, and that your profiles contain the right keywords for your target industry or job function. Structure your LinkedIn presence for the role you would like to have rather than the role you currently possess or most recently held. Support the brand you’ve built on your profile with your posting activity. Aim to position yourself as a thought leader in your industry or regarding specific topics you want to be known for. Our coaches can advise on how to do this with the strongest positioning.
In conclusion, the challenges of the current business landscape call for adaptability and resilience from both job seekers and businesses alike. Despite the ongoing market hurdles, it’s essential to recognise the potential for growth and innovation within these challenging conditions. Staying well-informed about market trends, fostering skill development, and nurturing employee satisfaction and retention are key strategies for businesses to position themselves for success in the upcoming Q4 and beyond. For those finding themselves in need of a career transition, this is an opportune time to refine skills and prepare for the opportunities that lie ahead, knowing that the right mindset and approach can lead to success in any economic climate.
To learn more about how Rialto executive career transition and executive outplacement services can support you to differentiate your brand in line with future market requirements, get in touch with our team on +44 (0) 20 3746 2960. If you haven’t signed up to receive our market insights or info about our upcoming events directly to your inbox, click here to subscribe.