Recruiting top executives is getting harder because, In the early 1800s, our forebears witnessed the beginning of a colossal economic transformation with the onset of the Industrial Revolution. Within a single generation, old city neighborhoods and rich farmlands were cleared out to make way for the construction of steel mills, rail yards, warehouses, and office buildings. To fuel this economic boom, people migrated from the far reaches of rural America to take on jobs they would hold for the rest of their working lives.
Today, old city neighborhoods and rich farmlands are still cleared to make way for trade and industry. (China and India are prime examples.) But now, businesses exist in a completely different environment than they did during the Industrial Revolution. The tidal wave of economic change, pressure to increase shareholder value by the quarter rather than the year, outsourcing and right-sizing — all these trends have greatly increased the demand for top talent and will continue to do so as we enter more deeply in an Industry 4.0 World.
Recruiting top executives is hard.
In the years to come, it will only get harder. This is due to three key trends:
- Demographics: A lower birth rate in North America combined with the aging of the Baby Boomer generation has resulted in a contraction of available executives. In other words, when an older executive retires, few younger workers are qualified to fill his shoes.
- Brain drain: In the 1980s and 1990s, companies may have saved money by trimming senior management ranks. But that brain drain coupled with attrition robbed them of their ability to grow the next generation of leadership.
- Globalization: Companies in first-world countries have expanded their market around the globe. At the same time, countries that were once considered third-world nations have become economic powerhouses. As a result, the global need for executive talent has been pushed beyond our capacity to produce it.
Over the last three decades, demographics, attrition, and globalization have profoundly affected the labor supply — particularly for executives. The result: a scarcity of executive talent. This global shortage of leaders drives organizations to aggressively seek the best.
Recruiting top executives has just gotten much harder
More recently, COVID-19 has exacerbated the issue. COVID-19 has helped accelerate early retirement of people 55 years of age or older, as they are now leaving the labor force in the millions.
In this talent-hungry environment, the rules for recruiting top executives have changed. It’s no longer enough to passively collect résumés. The to executives who have the talent you need — who can design a top product, manage complex projects, perform marketing miracles, sell new customers, or lead your organization — are already employed, can take their pick of top opportunities, and will make a career move only if the opportunity is truly compelling.
Waiting around in the hopes that your ideal executive will miraculously become available precisely when you need her is foolishness. You can satisfy your requirement for people with talent, tenacity, and dogged determination only by pursuing them with a clearly articulated strategy and focused plan. Hiring leaders for an Industry 4.0 World requires looking at recruiting through a new lens.
The key to recruiting successfully in a 4.0 World now means going after top executives that aren’t looking for work.