Two weeks ago we talked about people trends we expect to see this year, and their unintended consequences: the shift back towards office based rather than hybrid working, the use of AI to automate roles, and the increased use of equity as part of compensation packages.
This week, we’re exploring four further developments we’re seeing in how companies are approaching their people strategy. And while they too carry risks, we’ll explain why they give us hope that Britain’s ambitious businesses will find good growth in a stagnant economy.
1. Demand will rise for international talent
Immigration is, as ever, high on the political agenda. Record numbers of people are arriving in the UK, and their labour is proving essential for the continued function of many sectors, from healthcare to hospitality.
Most of the attention goes to jobs at the lower end of the market, but immigrants are making their mark at every level. When it comes to senior executives, ambitious businesses are increasingly hungry for international talent, and we expect this to continue this year.
It’s not only because they want the best candidates for the job, no matter where they’re from. It’s also because, with the economic growth limited in the UK, international expansion and export growth are becoming imperatives for many firms, and senior executives with global experience and knowledge can be invaluable in achieving them.
Demand will therefore hold up, despite policies introduced to deter migrants, although if these get too hostile we may have a new problem with supply. As was evidenced in the Trump era in the USA, you can’t take for granted that top talent will always want to come to your country, regardless of how they’re treated.
2. Quotas will start moving the dial on diversity
The use of quotas to achieve diversity targets has always divided opinion. To detractors, it’s a strategy that uses discrimination to combat discrimination, imposing another layer of red tape on companies and encouraging tokenism rather than deeper change.
Supporters counter that quotas are the only way to overcome ingrained resistance, and that once they’ve changed who’s in the room, they will rapidly become unnecessary.
There’s been notable success in broadening gender representation in boards, but we’re now starting to see quotas being applied in executive roles too. It will not be a quick fix, and ought to be applied with care: the pipeline sadly isn’t there yet for immediate parity.
Indeed, where quotas can really help is by forcing hiring managers to think about the pipeline over a ten or even 20-year period, rather than just asking for 50:50 shortlists for roles today.
That’s not to say we should limit our ambitions for equality. Whether we use quotas or not, we can achieve meaningful progress, quickly. It will just require sustained inclusive leadership, and creativity in where and how we search, to ensure we can access great candidates who may have been overlooked in other eras.
3. Flexible contracts will become more common
Two factors are driving up the prevalence of temporary contracts, at every strata of a business, from C-suite interims to seasonal retail workers.
The first is pressure on costs. The second is the need in this fast-paced market for agility: fixed-term engagements are perfect for experimentation, allowing you to try something out without having to commit long term.
Using quality interims can bring many benefits, including wide – though sometimes also specialist – experience and skills. The best candidates also bring an urgency to deliver results, which can help lift a department that’s gone a bit flat.
The key, as ever, is to find the right people for your business and for what you’re trying to achieve.
4. Employers will (hopefully) apply more rigour to recruitment
We’re hearing from more and more candidates that some employers don’t really know what they’re looking for. By entering the process with only a vague definition of what they want someone to do, and what they’ll need to make it work, businesses are wasting everyone’s time.
Candidates reach late stages of recruitment processes, only to discover that they were never right for the role in the first place. This can leave a bad taste, putting them off working for that business for later roles for which they may have been perfect.
The business, meanwhile, ends up talking to scores of people in an elongated process that may still result in the wrong hire.
What we’re seeing in the smartest employers – and what we’re hoping to see more broadly – is a clear sense of what they need and why. If the most important thing in their new CFO’s brief is to manage a major acquisition, then they need someone with M&A and potentially capital markets experience. If the acquisition is international, then global experience should be there too.
It’s why we work with companies carefully to help them define their needs, well before we think about a strategy to search for the best candidates.
Cause for hope
The pattern is towards companies using quotas for improving diversity and inclusion, using flexible contracts for agility, searching for international talent for global growth and, hopefully, being as rigorous in determining their exact requirements as they are in recruiting the right person.
But none of these things is guaranteed to lead to better outcomes, whether that’s firing up the UK’s growth engines, or democratising access to opportunity.
Where we are hopeful is that the companies we work with – ambitious, dynamic and thoughtful – get it. We have confidence that they will do what is necessary to achieve the good growth that they’re looking for, and we look forward to working with them over the coming year to make it happen.