Executive Hiring Trends Reshaping 2024
February 26, 2024 – The realm of executive hiring is experiencing a paradigm shift, with notable trends emerging that redefine the recruitment landscape. In a recent report, ON Partners explores four executive hiring trends that indicate talent demand strategies of the future.
1. Middle America Ignites: A Renaissance in the Heartland.
The recent Business Insider article highlights the burgeoning trend of tech and innovation companies thriving in Middle America. This shift signifies a departure from the traditional tech hubs on the coasts, according to the ON Partners report. The growth can be attributed to several factors, including favorable economic conditions, business-friendly policies, and a skilled workforce.
Executive recruitment has notably surged by 58 percent in the Midwest region over the past two years, according to ON Partners’ search data, surpassing the figures from the preceding two-year period. This notable shift is particularly pronounced in Illinois and Ohio. Texas has spearheaded a 10 percent uptick in executive leadership placements during the same period, while Georgia and North Carolina collectively witnessed a substantial 33 percent increase in executive hiring.
2. Payday Revolution: Unveiling Compensation Disparities.
In executive hiring, the top question is often about compensation expectations. ON data for 2023 discloses average compensation ranges for C-suite leaders, depending on the organization’s current size. As the company size doubles C-level positions increase in total median comp expectations by an average of 11 percent. The CEO role rises in compensation at a higher percent rate than any other C-level position.
3. Calculated Moves in Human Capital Reshape PE Dynamics.
Harvard Business Journal highlighted the evolving challenges facing private equity (PE) firms, emphasizing the increasing importance of effective leadership. Historically, the ON Partners report says that PE firms focused on financial engineering, often neglecting the development of leadership capabilities. Several factors, including a decline in attractive acquisition targets, rising interest rates, and longer investment hold times, have led to a shift in talent expectations and management.
Related: Strategic Talent Acquisition Planning in 2024
“Thus, the operational value creation has become more crucial than financial engineering, and PE executives recognize the significance of leadership effectiveness,” the ON Partners report said. “A qualitative shift in the qualities sought in executives, with a growing emphasis on managing, motivating, inspiring, authenticity, credibility, emotional intelligence, and people skills.”
Year-over-year ON data shows an increase in private equity-backed searches by 70 percent plus in the last two years, but also an elongated time of executive search completion. Identifying and ranking qualitative skillsets and experience for PE candidates is time-consuming, often creating a longer search process for talent.
Top 5 Executive Search Trends for 2024
The executive search sector must always adapt to the times to properly served their respective client bases. From the integration of artificial intelligence in recruitment processes to the increasing importance of empathetic leadership and the reshaping of workplace models, search consultants must stay ahead of the curve. A new report from Kestria explores the emerging trends and strategies that are setting the course for a new paradigm in executive search!
In response to the evolving landscape of PE talent, ON is set to launch a new AI-enabled candidate sourcing and assessment product in early 2024. This innovative solution is informed by millions of data points within our network, facilitating candidate identification based on pertinent skills, experiences, and relevant events.
4: Power Surge: New Talent Landscape in Energy and Cleantech.
As the industry continues to evolve, the talent strategies in the energy and cleantech sectors have changed according to the latest U.S. Energy Report. “The changing landscape of human capital talent strategies in the sector can be attributed to several factors including growing industry complexity, demand for specialized skills, innovation and technological advancements, increasing emphasis on sustainability, and the ongoing transition from traditional energy sources to renewable and clean energy,” the ON Partners report said. “Every technology category in the energy sector, according to the report, saw employment growth in 2022. And with significant federal investments across several categories of the sector, the talent pool will continue to expand and shift, thus driving new expectations for executive leaders in the space.”
Related: Reasons for Cautious Optimism in 2024
When comparing the timing of federal investments and talent expansion within the energy and cleantech sectors, ON data illustrates a 111% increase in executive hiring within the sector over the last three years.
4 Critical Areas Shaping the HR Landscape
Seth Harris, partner at ON Partners, recently summarized four pivotal trends dominating the minds of CHROs today that are shaping the HR management landscape. From managing the hybrid workforce to CHRO burnout to merit pay, HR leaders face a variety of workplace opportunities and challenges to solve this year.
1. Navigating the Hybrid Horizon: Balancing Flexibility and Culture.
Adopting a hybrid workforce isn’t a one-size-fits-all approach. It’s a nuanced business decision demanding careful consideration of benefits and hurdles, according to the ON Partners report. “The allure of wider talent pools, happier employees, and boosted productivity is undeniable, and building a strong company culture, overcoming collaboration and communication challenges, and ensuring robust security all pose questions that should be contemplated,” said Mr. Harris. “By taking a deliberate look at your company’s unique needs, objectively weighing the pros and cons, understanding how technology can enable connectivity, and embracing an open-minded approach, you can unlock the hybrid model’s true potential for your organization while prioritizing flexibility.”
2. DE&I in the Wake of Change: Charting a Path to Inclusive Excellence.
In the wake of the recent Supreme Court ruling on Affirmative Action, companies are reevaluating their DE&I initiatives. “One thing remains clear, fostering equal opportunities and building an inclusive environment for all employees is fundamental,” Mr. Harris said. “CHROs prioritize holistic talent reviews, robust mentorship programs, and data-driven approaches to identify and address inequalities. By focusing on creative and sustainable strategies, CHROs can still achieve their DE&I goals, ensuring a fair and just work environment for everyone.”
3. Merit Pay: Rewarding Performance, Righting the Balance.
Implementing merit pay systems can be complex, and fraught with potential subjectivity and bias. “However, clear performance criteria, rigorous evaluation processes, and careful planning can effectively motivate performance and foster a rewarding work environment,” said Mr. Harris. “Over 90 percent of companies utilize some form of merit pay, often through annual raises and performance-based bonuses. The key to success lies in meticulous planning, transparent communication, and continuous improvement, ensuring a merit system that incentivizes excellence while remaining fair and equitable.”
4. Combating CHRO Burnout: Re-energizing the Guardians of Human Capital.
CHROs are facing higher levels of burnout due to the ever-expanding scope of HR, relentless expectations, and the persistent struggle to maintain work-life balance, often exacerbated by limited support and resources. ON Partners data indicates that CHRO tenure is declining across organizations year over year. Our data illustrates that 25 percent of CHROs will stay in their role for one to two years and the average duration of CHRO tenure in 2023 was 2.5 years.
“Recognizing and proactively addressing this challenge is crucial,” Mr. Harris said. “Strategies like building strong support networks, openly discussing challenges and workload concerns, and investing in leadership development can equip CHROs with the tools and resources they need to combat burnout and thrive in demanding roles.”
Related: Predicting 2024’s Talent Acquisition Trends
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
