The Financial Crisis - Stanton Chase International

FEBRUARY 2009 T h e O n l i n e E x e c u t i v e N e w s f o r C o r p o r a t e L e a d e r s
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FROM AESC
The Financial Crisis and Senior Executive Recruiting: The Answer
he answer is the convergence of
two very strong underlying trends T that together have created almost
a global wave of demand for senior executives
in recent years. These are the
demographic shifts in the Western
economies and the explosive growth of
the emerging markets.
Although both trends have been talked
about for years neither have been predictable
in terms of their effect on a wide number of social and economic
phenomena, not least being the supply of executive talent.
But in the last five years we have seen how very powerful these
forces are – McKinsey predicted a War for Talent 10 years ago, based
upon their demographic forecasts. But their calculations were made
without even taking into account the impact of demand in the BRIC
(Brazil, Russia, India, China) and other emerging markets, which was
then hidden from view.
Today, many of our member firms around the world report fierce demand
for talented executives from a wide range of sectors and organizations.
Such is the limited supply that in many cases the
demand cannot be easily met and a form of fast rotating musical
chairs is taking place. The rotation of executives in China is only one
example. Another is the international energy industry which is
starved of engineers due to the lack of investment in training of petroleum
specialists over many years. Another is the CFO market in the
United States where the rapid turnover of executives has lead to top
ranked and unblemished public company CFOs becoming almost an
extinct species. There are many others.
Inevitably executive search firms thrive on
imperfections in the market and their help
is designed for organizations in need;
in need of strategic help to plan for adequate
succession and upgrade competence,
or for tactical help to respond to a crisis.
Either way, if supply becomes tight then
inevitably buyers become more attentive
and more responsive to market need.
This has clearly happened in recent years and many organizations
now recognize that effective senior executive planning and resourcing
is crucial to their long term success and even survival. For this
reason many have created Talent Management department.
More advanced organizations now talk about cultural and structural
transformation in order to respond to the changing needs of executives,
their desire to assume responsibility early, to respond to their
work/life balance needs etc. Equally, such organizations recognize
that their recruitment proposition must be compelling. Inevitably
some client organizations do not appreciate the realities of the marketplace
and here search consultants can help to provide feedback
and advice.
Executive
Newswire
But what now? If the economic crisis is going to cause job losses
then won’t there inevitably be an oversupply and thus the conditions
described above will cease to exist.
The answer, perhaps unsurprisingly, is no.
Firstly, recessions don’t last forever. Secondly, talented executives will
still be needed and sought after because, unless many organizations
cease to exist during the recession, there will still be a demand for
leadership and management skills to chart the troubled waters.
Many organizations know from past experience that cutting into a
key resource such as executive talent during an economic downturn
will only come to haunt them when demand returns.
Good managers don’t grow on trees and wise CEOs and boards recognize
that investing in people when the market is soft can be an
excellent strategy.