Canadian Executive Search Market Adapting to Change and Moving Forward
April 11, 2022 – For executive recruiters, Canada has been a particularly good place to set up shop. The country hosts an expanding number of diversified industries and dynamic growth sectors that are well-positioned to beckon talent. The pandemic has changed the business landscape for everyone, of course, from recruiters to businesses to candidates. And that has made competition for talent heated, with the best candidates seeing multiple job offers.
For many organizations, hiring and retention of key talent is now more vital than ever. The problem, say recruiters, is that there are more job openings than prospects. Compensation matters, of course, in winning the best talent. But positive culture, sustainability, career development opportunities, and flexibility on remote work arrangements will all play a big part going forward.
“We are continuing to see a strong market for the executive search space in Canada at the leadership and professional level,” said Pamela Ruebusch, founder of TSI Group. “It is clear that ‘attracting talent’ takes more effort than ever before right through to the final signing of offers and confirming the onboarding plan. Clients in manufacturing, supply chain, transportation, and distribution are competing for talent at all levels. This is driving up compensation bands and candidates are looking more and more for roles where they can have a flexible work-life balance. We expect that we will continue to see this trend throughout 2022, which means having a talent acquisition strategy that is innovative is key.”
TSI Group has seen an increase in competition for top talent and candidates becoming more selective on what they are looking for. As a result, there have been more conversations on alignment of what the candidate and client are seeking from the professional level up to the C-suite. “With the start of the year, there are always more sales and sales leadership roles,” said Ms. Ruebusch. “We are also seeing an increase in leadership roles in operations and more opportunities at the GM/president level.”
Increase In Turnover
“There is a significant increase in turnover at all levels of leadership brought on by the demographics of an ageing workforce and fueled by the impact of COVID-19 on job security, work/life balance, and the continuing growth of a skills-based economy,” said Tony Woolgar, senior partner and head of national healthcare leadership practice at Legacy Executive Search Partners. “For larger organizations this has been reflected in a trend towards downsizing to optimize efficiency, including a reduction in management costs and overheads and delayering of management structures. For smaller organizations the challenge continues to be to ensure sustainability in the market rather than target growth and increased market share.”
“COVID-19 has provided an exciting opportunity for us at Legacy Executive Search Partners to prove to all our clients and potential candidates that we can still offer a personalized and flexible approach to every search despite every aspect of the search process being carried out remotely,” Mr. Woolgar said. “Being a boutique firm respected as a preeminent search firm in municipal government, broader public sector, healthcare, and the not-for-profit sector, we have been able to grow our business across each of these sectors by being adaptive, responsive, and resourceful in supporting organization development and redesign to meet the unique challenges presented by COVID-19 for each organization.”
“I think the search business will continue to thrive in certain industry segments as there is a clear shortage of skill-sets which have been highlighted through COVID,” said Kartik Kumar, partner and national practice leader municipal government at Legacy. “Although there were some price pressures in the initial stages of the pandemic as everyone was trying to reduce recruitment costs, through adjusting our fee structure and leveraging our excellent client management tool to provide a real-time communications channel, we have streamlined each step of our recruitment process to create the best value proposition for each client.”
“On a daily basis, we see North American business leaders constantly and simultaneously wrestle with trying to mitigate business risk and conversely how to manage, or prepare for, historic growth,” said John Watts, founder and partner at Forward Path Group. “Certain industries such as E-commerce and technology have had incredible growth during COVID, and those sectors that are hardest hit are scrambling to be the best prepared to ride the ‘post-COVID’ wave. Arguably, the strongest of those hardest hit sectors will be in an incredible position to drive significant profits and shareholder value. There is a definite ‘have and have not’ situation in the 2022 Canadian economy.”
Regardless of the sector, all of his firm’s clients are learning how to best balance a home-office workforce; none are expecting a return to the pre-COVID office, said Mr. Watts. “This workforce evolution is different for each sector and company, but none are immune to the migration to more remote-based employees,” he said. “CEOs across Canada are competing to attract talent working remotely that can drive growth, who are continually productive with interacting remotely, but we try to meet safely 1:1 as much as possible. Human nature is to gather and share, and we feel this need. From a candidate perspective, there are advantages and disadvantages by being remote. It is easier for candidates to click a video link than dress up and meet at a coffee shop. It is also more convenient for the recruiter. But efficiency and quantity does not mean quality. To ensure we are finding great talent for our clients, we improved our remote interview techniques and leveraged assessments.”
“I believe that most businesses that were successful pre-COVID all took a pretty good punch on the lip in the early stages of COVID,” said Bruce MacDonald, founder of MacDonald Search Group. “Like every major change, it took time to understand. Once they settled into what the impact of the pandemic meant to their business, they realized they needed to keep moving forward. So, they began to re-embark on the growth strategies they had on the chalkboard. Then those successful pre-COVID companies began to thrive. I guess the one exception would be the hospitality industry which continues to struggle under the government health restrictions. This led to a 2021 of robust business growth for many of our client base.”
From a candidate perspective, their needs became more paramount, said Mr. MacDonald. “They all went home to work, their companies eventually flourished, and now they are more convicted in meeting their needs – work from home, on their terms and with flexibility,” he said. “The net result is a super-heated recruitment world that swayed the pendulum to the candidate. In 25 years in the business, I have never seen such a candidate driven market.”
Post-COVID Workforce Trends Driving the Labor Market
Experts agree that we’re experiencing unprecedented times in the global labor market. While a few of the buzziest phrases of this phase include the Great Resignation, the Great Realization and the Great Reshuffle, there are many more “Greats” where those came from, according to a new report from Business Talent Group (BTG). Each of these workforce trends center around the same notion, that the pandemic has caused major changes in the labor force at all levels across nearly every industry.
Mr. MacDonald’s initial thought was there wouldn’t be much change in the short term from COVID. “However, we are in February 2022 and Omicron is making its impact felt,” he said. “Businesses, especially public facing ones, will all face a short-term struggle from more of a staffing perspective than a revenue perspective. We are all in the middle of the storm. The good news is we are starting to see case counts peak in those parts of the world where Omicron emerged earlier than here in Canada and hospitalizations are nowhere near the percent of cases counts as they were last year.”
Canadian Employers Recovering
Large and mid-sized Canadian employers are recovering from the impact of the initial phases of COVID, according to Michael Henry, managing partner of Massey Henry. “They are experiencing labor demand pressures and supply chain challenges,” he said. “In addition, many businesses are working through the longer-term implications of digitization and hybrid employment models. COVID will continue to impact businesses in 2022 and beyond.”
“That said, COVID has accelerated digital transformation and a rethink of traditional work models,” said Mr. Henry. “This acceleration now has its own momentum apart from the impact of current and potentially successive COVID waves. COVID has acted as change agent affecting many areas of work and family life across the globe. In combination with climate change and ESG adoption, business and employment models will undergo dramatic change over the next five years.”
While COVID has changed the way we conduct business, it has yet to affect client demand. Financial services and fintech executive recruiting remain robust, Mr. Henry said. “We believe that the demand in financial services is a direct reflection of digitization and business model adaptation that has been accelerated by COVID,” he said. “The change has been most significant in candidate outreach and selection. Many searches are fully digital with no in-person contact from initial outreach to offer letter. While this has been a more prevalent model in mid and junior-level positions for some time, it is new at the C-suite level. Many selection committees and hiring managers still prefer in-person interviewing and finalist selection processes.”
Nowadays, however, many of these executive searches have not included any in-person contact, or only limited contact at best, said Mr. Henry. “Additionally, it is important to note the impact on client origination,” he said. “As with all professional service firms, in-person contact has been a foundational element in new business development. All firms have had to adapt to the realities and limitations of virtual outreach and relationship building.”
Related: Massey Henry Launches in Canada
Hiring and retaining key talent has suddenly become the No. 1 priority for organizations across Canada, according to Corey Daxon, president and managing partner at Feldman Daxon. “Post-pandemic growth, the Great Resignation and remote work have combined to create the perfect storm for organizations as they look to keep their star performers and add new employees to support growth,” he said. “The number of job openings significantly exceeds the number of job seekers, creating a candidate driven market that hasn’t existed in decades. And it is expected that employee turnover will continue to increase in 2022. With the balance of power shifting toward candidates, organizations, talent acquisition professionals and recruiters will have to find ways to stand out to successfully attract candidates. In addition to salary and benefits, the ability to clearly demonstrate positive culture, sustainability, career development opportunities, and flexibility on remote work arrangements will be big factors in securing new talent.”
Excess of Opportunities for Candidates
“As we head in to 2022, the excess of opportunities in relation to candidates is expected to continue to increase,” Mr. Daxon said. “Workplace changes that COVID necessitated, including remote work and the technology we have all adapted to support it, will continue to be a part of organizations even as the pandemic fades. As will the psychological changes many have made regarding work-life balance and an increased value on mental health and career satisfaction. Companies are already seeing a significant decrease in the number of responses to job postings. Candidates are being much more selective and picky vs. replying to anything that remotely resembles their experience. As a result, the value of proactive, targeted recruitment has increased substantially. Successful employers will use recruitment tactics that focus on reaching out to passive candidates versus posting and hoping for the best.”
“Top quality talent is tough to find in today’s world, so while organizations are trying to become more efficient with costs and outsourcing, they are also struggling to find the right people for their senior C-suite or financial role to be filled,” said Paul Verriez, president of Verriez Group. “That’s where we can come in and ensure we find the best talent for their long-term needs.”
“Although we do have an office downtown, many of us have been remote for a few years now (prior to pandemic) so it has not affected us from that perspective, other than internal in-person collaborative events,” Mr. Verriez said. “Other than that, traveling and being able to see both clients and candidates in person has been constantly placed on and off hold, so it will be nice to resume normal activities for a long period of time. Conducting candidate interviews via Zoom or Microsoft Teams we have found our delivery time to our clients has been reduced as we have not had to organize travel schedules to meet them in person. We have also had to discuss vaccination policies with clients, and how that affects recruitment.”
“Since travel has been placed on hold, we’ve taken the opportunity to collaborate both internally and externally with Microsoft Teams and Zoom,” said Mr. Verriez. “We’ve also taken the opportunity to utilize and invest more into our CRM, search and marketing initiatives that require technology to become more efficient. Candidates are now, more than ever, concerned around the financial health and future growth prospects of a prospective employer. Previously, there was often an assumption that a hiring company was a growing and healthy company. Now, employers are having to open up and share more with respect to their financial health.”
Related: Moving Past COVID-19
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
