A Look at Emerging Trends Affecting Leadership Teams Today
July 14, 2023 – In 2023, the war for talent is accepted doctrine by boards and investors competing for human capital. The demands of new technologies, digital transformation, and trillions in capital funding have, for decades, outpaced the supply of capable leadership. Nowhere is this more true than among technology executives tasked with driving innovation from the C-suite, according to a new report from Riviera Partners. “During the post-pandemic tech boom, these technology leaders – engineering, product, information and security executives, and their lieutenants – saw accelerated demand for their vision, leadership, and technical know-how,” the report said. “More recently, the secular trend toward new technologies and digital transformation has continued apace, with this cadre of corporate leaders driving the future of their enterprises and the global economy forward.”
Over the last three months, Riviera conducted a study of more than 1,000 technology executives in its network to understand the most pressing dynamics impacting their talent-related decisions – both as candidates and hiring managers. To do so, the firm engaged with study participants quantitatively via survey, generating more than 150,000 data points, and synthesized millions more from Riviera’s proprietary candidate platform. The firm segmented insights across dozens of dimensions like functional role, seniority, revenue, funding status, headcount, employee growth, hiring intent, HQ location, and industry vertical.
Compounding forces post-pandemic (disruptive technologies, remote work and funding pressure among them) have eroded “switching costs” for tech leaders, according to the Riviera Partners report. “These executives have furthermore adopted a shorter time horizon for chapters of their careers demarcated by clear objectives and expectations for financial gain,” the search firm found. “At an average of three years among respondents, tenure has never been shorter. Contributing to this dynamic: greater openness to change than pre-pandemic. Among those we surveyed, one-in-four are actively searching for their next chapter, while an additional two-in-five are passively reviewing opportunities.”
Challenges Remain For Hiring Tech Leaders
Reasons have changed, but hiring technology leadership “remains as challenging as 12 months ago,” and the outlook is similar, said Riviera Partners. The firm found that contributing factors like valuation skepticism, “noise in the system” from Big Tech layoffs, and “under resourced internal talent teams” have replaced “talent scarcity,” “funding pressure,” and “unrealistic comp expectations.” Nearly three in four said it has remained challenging to hire tech leaders in the past 12 months, with only a slight drop-off looking ahead. A net nine percent said they will continue hiring at the same or faster pace as the last 12 months vs. those who will pause hiring or reduce headcount.
Compensation Steady, Trending Higher: Private Equity Making its Move?
The Riviera report also found that compensation has been stable since markets corrected mid-2022, and a net 15 percent of respondents report rising guaranteed compensation. “Chief among this group paying more: private equity-backed businesses, and those in mid-market revenue bands,” the report said. “Amidst a cooling of the venture funding environment and dislocations among public company shares, growth equity and middle market PE appear to be filling the void with increasingly competitive compensation. Interestingly, equity compensation remains stable (as a percent of available pools) despite noise in the system around valuations.”
Convergence in the C-Suite: Growing Interest in Consolidated Impact & Accountability
Chief technology officers and chief product officers have long advocated for more expansive responsibilities. “Historically, resistance has come from CEOs who preferred division of labor and checks/balances over unified accountability,” said the Riviera report. “In the current market environment, where leadership ability is the number one hiring criteria for CEOs and boards, a shift is emerging toward consolidated ownership – especially at firms with product-centric CEOs.” In fact, nearly one in five companies in the firm’s study said they have interest or plans to merge these roles, while seven in 10 tech leaders would find a combined role attractive.
5 Trends That Will Shape the Future of Work
The dynamic landscape of work is constantly evolving, driven by technological advancements, AI, a remote and hybrid workforce, shifting demographics, and changing expectations. As we navigate the complexities of the digital era, it is essential for leaders and organizations to stay ahead of the curve and anticipate the trends that will shape the future of work. In a recent report, talent advisory firm DHR Global explored five key trends that are set to redefine the way we work, offering insights for leaders and businesses to thrive in this ever-changing environment.
Quality of Leadership
Unsurprisingly, Riviera found that tech leaders evaluating new opportunities are focused on stability relative to 2022. However, employers may be overestimating the importance of traditional measures of stability like “job security” and “profitability of business.” When asked, both employers and candidates cited “leadership” as the North Star for executive hiring and new roles, respectively. “Isolating the top three factors from each side, leadership is the only common denominator,” the Riviera report said. “Employers pitching benefits like flexible work from home policies, strong company culture/mission, or attractiveness of market segment should be aware top candidates increasingly view these as table stakes.”
Related: What’s Different About Hiring Leaders Today
AI Interest Spikes Amidst Push for Productivity
The Riviera report said that tech leaders are not waiting for large-scale strategic decisions related to AI, regulatory oversight, or industry guidelines. “Across the spectrum of company size, they are rapidly experimenting with new technologies like generative AI,” the firm said. “Fully one in three companies in our study have implemented AI to automate repetitive tasks, support code development, and increase productivity. Enthusiasm exceeds more established priorities like cloud, data science, and security. Unclear, however, are the medium-term risks to rapid adoption. For tech leaders, these technologies also introduce new challenges like greater self-governance requirements and quality control, alongside change management related to more commoditized (and thereby redundant) development resources.”
The Future of Work: All Roads Leading to Hybrid
Where we work and how we collaborate has been a moving target post-pandemic. Riviera notes that fatigue maintaining cultural cohesion, waning collaboration, and less immersive onboarding in remote environments have underpinned a shift back toward office work. A plurality, or more than one in three companies in the firm’s study, now mandate one to three days/week in the office (followed closely by 32 percent who are fully remote), and a net of 25 percent expect mandated time in the office to increase in the coming 12 months.
Candidates are similarly warming to return-to-office. Half of the tech leaders in Riviera’s study said they would be open to roles requiring them to work in a different city multiple times per month. A net 40 percent said they are more open to multiple days/week in the office vs. 12 months ago. A net 20 percent said they are more open to fully relocating to a different U.S. city than they were 12 months ago, a directional trend shared for both different U.S. regions and Europe (but not Asia or Latam).
Riviera Partners is a global recruiting firm specializing in the technology industry. The firm provides clients with optimal placements by combining recruiter interactions and experience with data-driven findings about candidates. Riviera Partners has recruited for key executive roles at Pinterest, Postmates, Tinder, Twilio, Uber, Asana, Dropbox, GitHub, DoorDash, Hulu, and partnered with venture-backed concerns, including Andreessen Horowitz, Sequoia, Benchmark, Accel, Menlo Ventures, KPCB, Greylock, and General Catalyst.
Through machine learning algorithms, Riviera Partners identifies specialized, highly qualified candidates that fit an organization’s needs from 600,000 professionals across tech geographies. Riviera can often provide a short list of candidates in 30 days and has a success rate of over 95 percent.
Related: Four Trends That Will Shape the Future
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
