As we start a new calendar year and the sector starts to speculate about the impact of the current economic conditions and forthcoming elections in the year ahead, we at Penna naturally turn our attention to reflecting on the learning and data from 2023 from a talent acquisition, retention and development perspective.
The executive interim market
Last year felt a bit like 2011 from an executive interim recruitment perspective. Back in 2011 austerity was kicking in and it was evident that, although the sector needed specialist interim support to help transform, the financial situation meant councils had the dichotomy of trying to manage the change with the existing workforce or choose to bring in expertise that the Daily Mail rudely called ‘overpaid consultants’ to affect change more quickly.
Interim demand in local government in 2023 has been consistent with 2022, with both years showing a declining demand from 2021. But as we experienced in 2011, decisions and approval to hire interims has become more challenging. Decision making has been slower and time to hire has increased. When you couple that with a depleting interim talent pool, particularly in some key areas of demand; children’s, monitoring officers, section 151s and HR/OD; and councils chasing the same expertise to fix similar problems, speed to interview to secure candidates is essential to success.
In 2023 interim demand focused on finance, place, and social care; looking forward to 2024, we predict more demand for transformation, housing, place and finance in particular. Expertise to in-source and manage complex commercial change have been in high demand too, with many councils seeking experts to re-negotiate, exit, or bring in-house major contracts or commercial arms.
The national economic picture, the perilous financial situation in councils, and local and General Elections means an ambiguous year lies ahead. We know that bringing in specialist support can help solve problems more quickly, saving time and money in the long term, but will the short-term funding pressures influence decision making, further reducing interim usage?
The executive search market
The year 2023 presented a consistent demand for senior leaders, but there was a 29% reduction in vacancies compared to 2022. Some 52% of chief executives in local government have only been in post since March 2020, and in 2023, 56 new chief execs were sought across the market compared to 63 in 2022. However senior leadership roles for place, social care and corporate resources (many of which were the s151) were all in higher demand than the top job, with place responsible for 31% of hires, social care 27%, and corporate resources 17%. This is consistent with 2022, showing the continued need for leadership, financial and social care expertise, and an insight to where there is higher turnover.
It’s not surprising that when it came to chief executive appointments in 2023, more candidates secured the top job from a step-up role or different sector than in previous years, reflecting the talent drain since Covid – and the real effort being made to welcome more diverse talent. We were particularly delighted to see a record six of our Aspirant CEX delegates secure a chief executive role in the year.
While we’ve seen an increase in demand for HR/OD leaders there has been much lower demand than in 2022 for permanent equivalents. Is this a factor of short-term need being the focus, rather than a long-term investment in the people agenda?
The sector has also seen an improvement in the diversity of its senior appointments. In the 200+ roles we managed in 2023, 55% women and 26% EM candidates were appointed. This improvement is a direct result of tailored and focused search, an increasingly fresh talent pool and of local government’s commitment to building a truly representative workforce.
Looking ahead to 2024, it is hard not to anticipate a slight reduction in hiring activity as authorities manage pressured budgets and navigate the elections – potentially meaning restructures, key hires and investment may take a backseat as the important business of politics takes centre stage.
However, whatever the size and scale of the market, we anticipate a continued emphasis on strategic leadership roles, with growing emphasis on transformation, digital and change. The demand for visionary and innovative leaders who can navigate complex landscapes remains paramount.
The professional and middle management market
Through our candidate sourcing team, we have been supporting the sector to navigate permanent recruitment across the £30-£80k salary range, particularly for middle management levels and specialist, harder to fill positions. In 2023 many of our conversations and hiring requirements occurred due to restructure and streamlining of teams.
With a growing appetite to reduce agency spending in social care and other professional areas, there has also been a notable increase in demand for finance, property, building safety and construction.
With year-on-year increased demand in legal services, planning and development, and growing demand for housing, built environment, and capital projects expertise (60% of our recruitment in 2023), the competition for talent with the private sector remains high – and remuneration, flexible working and employee benefits remain key issues.
There’s also been a notable emphasis on reaching a more diverse audience and integrating a more robust diversity and inclusion strategy in this area of recruitment in line with that seen in our executive market, which can only be positive and highly encouraging for improving the representation of the workforce at all levels.