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The market for leadership talent in 2022

Written by: Sam Ellis is director of strategy and marketing for GatenbySanderson and Frazer Thouard is partner for GatenbySanderson’s local government practice
Published on: 13 Jan 2022

As we start what is likely to be another very active year in finding and developing senior talent, it’s timely to look back over the trends of 2021 across public services. What are the skills in most demand and is investment keeping pace with strategic direction? A battle for talent is no longer sufficient to describe the potential long-term skills shortfall, with Fortune Magazine recently predicting a ‘war’ that will continue until 2031.

It will come as no surprise that activity across the senior talent market increased significantly over the last 12 months. Following the hiatus in early 2020, as the world reacted to immediate pandemic frontline needs and then adjusted to new ways of working and changed priorities, 2021 saw some catching up and re-focusing. Overall, our data suggests that total executive recruitment increased by around 30% last year. While the pandemic explains much of this increase, it doesn’t account for total growth as we estimate the market is 16% ahead of 2019 and around 6% ahead of 2018.

Uncertainties around the General Election, Brexit, an economic downturn and structural change within sectors have all contributed to under-investment in recent years.

This same growth pattern is largely reflected across all sectors, from local government to health, education, central government, regulation and not for profit. Housing is the only market where levels of executive recruitment appear to be still in recovery.

As the senior job market has swelled, so have the vacancies at the very top of organisations. We have seen more CEO roles become available in 2021 than ever before with a 62% increase vs 2020. A mix of many CEOs taking the decision to retire following their organisational navigation through the pandemic, mergers or restructures and some new startups have led to this impetus.

The lure of alternative lifestyles has been well documented across workforces and we see the impact at senior levels too. The growth of non-executive positions across public services is offering the opportunity of more portfolio careers, leading to some stepping out of the executive world at a much younger age, and often at the peak of their career, to take on new challenges.

Last year saw many authorities investing in their leadership capacity, creating and appointing to new roles, lessening the increasing burden on their stretched chief officer teams. We have seen this to be the case especially in the large frontline service directorates such as children’s and adults social care and environmental services in particular.

The output of this rapid change is a high demand and short supply of skillsets that will be exacerbated as 2022 progresses. In such a candidate-driven market, organisations will need to be flexible, timely and clearer than ever of their candidate proposition and employee experience.

So, where are the real pressure points likely to be? And do current demands reflect future customer needs?

While finance remains by far the largest senior segment, it is relatively static with just 5% growth on 2020 vs 30% across all roles. Operational roles are similar. This might indicate a higher number of CFOs and COOs have remained longer in role to steer their organisations through the pandemic and could lead to a spike of departures later in 2022.

Over the last three to four years, corporate services senior recruitment has reduced by around 15%, though HR remains strong with an increased emphasis upon people and culture. We have seen an increase in legal roles coming to the market in the latter part of 2021, as councils review the systems of governance they have in place to deliver their priorities of 2022. Communication and marketing roles have also grown by around 50% in the last year underlining the emphasis placed upon improved communication and engagement.

However, the areas of real growth across sectors are infrastructure, quality and performance, education and learning, customer engagement and external affairs. Though smaller in volume than broader corporate roles, these more specific skill spikes are likely to create a talent vacuum. Not surprisingly, roles relating to health – both public health and health and safety have increased by more than 100%. With volume more than doubling for niche specialist skills, where diverse executive talent was already under pressure it’s clear that organisations will have to work hard to attract the best talent.

Two senior segments that now warrant their own category are the green economy and equality, diversity and inclusion. While the green economy may still account for less than 1% of all roles, they equate to a similar investment as customer service roles, for example. With around 300 councils now having declared a climate emergency, this investment is sure to grow. These roles tend to be technical, infrastructure, financial and strategy-led and will require specialist search to identify existing or transferable skills.

Strategy and policy-led roles are up by around 40% on 2020 and we see these roles increasingly coming to market as organisations re-frame future strategies to be fit for a post-pandemic world. Candidate availability is likely to diminish as the year progresses and candidates from the commercial world will be increasingly targeted.

It’s also worth analysing areas where growth does not appear to match future demands. Roles around technology and data, in particular, remain relatively static. With the leaps and bounds in memory and tech being made globally and customer expectations continuing to rise, this does appear short-sighted. In local government, these roles account for only 12% of all senior vacancies out to market, compared to 19% for finance roles.

Commercially-led roles are also down by 44% since 2018 and while pandemic may have halted more entrepreneurial programmes, sectors seem to be slow in reigniting this focus. Economic development in local government, for example, is down by 24% vs 2019. This is a trend that we would suggest cannot continue if councils are to appropriately respond to the needs of their communities in the future.

It goes without saying that increasing leadership diversity, in its broadest sense, remains a priority for most organisations. To ensure progress continues, the need to rethink role requirements, consider skill transferability, on-boarding solutions and investment in talent pipelines should be a priority that is not simply passed on to HR but is at the top of every CEO agenda.

Sam Ellis is director of strategy and marketing for GatenbySanderson and Frazer Thouard is partner for GatenbySanderson’s local government practice