What the impact of current skills and people shortages will be at executive level and what companies need to do about it.
To say the last year and a half has been a little tumultuous would be an extreme understatement and, despite our hopes for a return to normal being raised at numerous points, it seems the pandemic and the effects of Brexit will be with us for some time to come.
One of the developments to emerge over the summer has been a growing skills and people shortage – UK job vacancies hit a record 953,000 in the three months to July, there is currently a shortfall of 100,000 qualified HGV drivers and industries such as agriculture, food processing and foodservice are struggling to find employees.
These shortages and the demand for staff have been concentrated in the lower paid end of the employment spectrum and so it has remained largely business as usual at executive level. Yet this may not remain the case for long.
But hold on, you may think, the shortfalls are volume driven and so there is no connection – for every hundred, thousand or maybe even more employees on the ground there may only be one executive so a shortage is hugely unlikely. Not only that but a contributing factor to the shortages has been foreign nationals who were previously working in the UK returning home and, again, this doesn’t really apply at leadership level. And you would be right.
The thing is a skills or talent shortage isn’t necessarily a lack of people but a shortfall in the knowledge and capability that a company needs to manage the issues it faces, drive necessary transformation and so succeed and grow. And when the business environment changes, like it is doing today, then the skills required may change to those that a company does not already possess, either at all or to the extent necessary.
What might these skills be? Certainly those related to differentiating one’s company and attracting and retaining staff, such as novel and effective recruitment approaches, corporate and employer branding, innovation in employee benefits or contractual terms, creating positive business cultures with strong, respected and respectful management and, more broadly, the ability to originate, design and deliver efficient and impactful transformation.
When everyone needs the best people with the greatest capability in any given domain, a talent shortage is created.
At the same time, if a company employs highly capable leaders with sought after skills then the risk of them being poached by another business increases. And, from the individual’s perspective, one can understand why – given the challenges currently facing so many firms, the grass could (rightly or wrongly) be seen to be greener on the other side.
Fortunately, there are several steps a company can pursue to mitigate the effects of an executive level talent shortage:
Analyse skills and talent requirements in light of the changing market, business and economic landscape so as to build a strong understanding of strengths and shortcomings. This will establish the basis upon which a solid strategy can be built.
Accelerate any ongoing internal change programmes so as to bring them to as early a conclusion as possible. This will enable the company to be presented as a world class and dynamic business to both current and prospective employees.
Ensure that a strong succession plan is in place for all senior positions. This should not only cover replacements to business leaders through promotion or external recruitment but training needs analysis and delivery. When appropriate, it may also be of benefit to communicate the succession plan to those concerned.
Ensure that the company’s executives are truly engaged, partly through business culture and the responsibility to manage positive initiatives but also through LTIP and other forms of corporate ties.
Build stronger relationships with executive recruitment consultancies, not just so that a supplier is “lined up” should they be needed but so that, through dialogue and collaboration, they gain a true and deep understanding of the company, its culture, products and services, people and the benefits and attractions of employment there, all of which can subsequently be leveraged to secure the most positive outcomes to recruitment projects. The same should also be true of the relationships between line management and internal talent managers.
When recruiting externally, search beyond the obvious and consider candidates from “outside the box”. Maybe someone from another sector has already faced and solved similar challenges? Maybe a background in a different corporate culture would bring new ideas? Maybe someone from a smaller business would act with greater agility while someone from a larger firm could bring knowledge of strong process? Maybe an appointee “stepping up” into the position from a more junior one would work with greater hunger and vigour than a person who has “been there and done that”? Maybe a person’s transferable skills would lead to solutions a company has never considered before?
Does the above seem over the top? At any other time maybe so but, given a skills shortage implicitly means that companies are competing with each other for the people that will drive their success, every action and angle represents a competitive advantage.
There have been skills and talent shortages in the past that have resolved themselves over time – they rise and fall. But then so do the fortunes and revenues of companies and the two are often linked.
What do you think? Is the spectre of executive skills and talent shortages real and so a true threat to your business or is it of no impact or concern at all? What measures is your business taking?