By Peter Elwell
After three years of considerable market turbulence, the employment market for senior executives in Australia appears to be returning to some sense of normality. While the market has returned to relative stability, all signs still point to 2024 being a year of persistent competition for senior leadership talent.
According to LinkedIn’s January 2024 Jobs on the Rise report, 76% of Australians are currently considering a new role. A blend of post-pandemic burnout, introspection, a desire for change, and the natural cadence of retirements continues to prompt leaders from across all industries to exit organisations at a steady pace. These departures not only contribute to a loss of valuable operational knowledge and experience but for many organisations also leave behind a void in executive leadership skills.
MAYBE: Recent inflationary pressures have also led many to view their previously satisfactory remuneration levels in a more critical light, particularly in organisations that have not adequately realigned remuneration levels to meet the current market.
Within Australia’s manufacturing, logistics, and industrial sectors, business sentiment remains positive yet cautious. Commercially these sectors are generally perceived to be meeting expectations, but caution is increasing. Economic headwinds, high interest rates, rising costs of living, and ongoing global supply chain destabilisation – all represent potential headaches with no clear end in sight.
With this backdrop of change and uncertainty, forward-thinking organisations are taking stock of their leadership teams. In many cases, the departure of a senior leader creates the opportunity to reevaluate the skills and experience needed to better meet the current market. Rather than replacing like-for-like, we are seeing organisations increasingly consider whole-of-ELT skill deficiencies when taking executive roles to market. In many cases, the change is being driven not by any deficiency in performance or skillset of the prior officeholder, but in a fundamental shift in requirements for the role. As such, demand is highest for those with the agility, creativity and resilience to thrive and adapt in uncertain, rapidly changing circumstances.
At the same time, the manufacturing, logistics, and industrial sectors are seeing significant investment in digital transformation at all levels. Cybersecurity threats continue to make headlines, with many organisations woefully underequipped to effectively manage these risks. These factors, coupled with the significant productivity-enhancing advancements promised by recent developments in generative AI, mean that digital-literate leaders who can add real impact across these emergent areas are highly sought after propositions.
The leadership talent market remains highly competitive. The latest ABS data still shows unemployment hovering below 4%, with participation in the labour market at record levels. With current media cycles often dominated by stories of global economic and political uncertainty, many senior executives are unwilling to contemplate the risk of a job change without careful guidance and engagement. As such, attracting top-tier executive talent with the aforementioned contemporary skillsets remains exceedingly difficult for many Australian organisations.
So what to do?
In a fast-moving, constrained labour market, organisations seeking to differentiate their value proposition to potential executives need to articulate and communicate their company narrative with clarity and consistency. At all points through the selection process, the story told should draw a line from the organisation’s origins to its current strategic plans and objectives, with specific reference where applicable to digitisation, automation and AI. While some of this may be commercial in confidence, ambitious executives will want to confirm that the organisation’s strategic intentions are backed up by real organisational commitment.
Throughout the search and selection process, the story told to prospective executive hires needs to be authentic, consistent, grounded in reality, and be more than just platitudes. Contemporary executives will also be looking to assess organisations on their values, culture and purpose, including their commitments to sustainability, social responsibility and diversity equity and inclusion.
An executive search partner can add real value by identifying and engaging with hard-to-find talent, and taking these narratives to suitable individuals on an individual basis. A good headhunter will leverage their sector expertise, industry networks and deep original research to draw on a pool of candidates far beyond your existing networks. They will identify, evaluate, and engage with the right individuals – but to be successful, they need to be supported the narrative, which can provide clear and compelling reasons why an otherwise happily employed target candidate should open a dialogue with a given organisation.
Effective search consultants also add value by testing assumptions around role requirements, ensuring your expectations align to market reality. Often, our advice includes encouraging departure from the traditional approach of prioritising specific professional or educational backgrounds and/or close connections from previous workplaces. By leaving behind the ‘who is in our networks’ mindset and moving towards a broader, more holistic view of what an ideal candidate can look like, greater opportunities exist to bridge the ELT skill gaps that can often impede growth.
Finally, we must highlight the importance of streamlined, candidate-centric search and selection processes. In order to attract and retain top-tier operational executive leaders, the selection process should be structured and time sensitive, including both behavioural and cultural assessment elements, with plenty of ‘two-way’ dialogue throughout. Noting that flexible and hybrid working accommodations continue post-pandemic to form a core part of the employee value proposition, expectations in this regard should be clearly and consistently communicated.
While the market for digital-literate operations executives in Australia is expected to remain tight throughout 2024, organisations seeking to attract top talent can do by constructing and communicating a clear narrative that includes their strategic intent, engaging effectively with the market, and ensuring that the search and selection process is tightly and transparently run.
Peter Elwell is a Partner at SHK Asia Pacific, leading search assignments within the Procurement, Supply Chain, Technical and Engineering practices.