Five Trends in Executive Search in Europe for 2023-25
February 14, 2023 – The way work is delivered continues to change; so does the negotiating relationship between organizations and candidates, particularly executives, according to a new report from Global Executive Search’s Portugal partner Pedro Branco. Organizations are being asked to find the best solutions to secure the best talent to achieve their objectives, the study said.
Europe – truly the “old continent” – has increasing population aging rates. Countries such as Italy, Germany, and Portugal have the highest average ages, not only in Europe but also in the world, according to Mr. Branco.
“Indicators suggest that the problem will become more acute in the years to come,” he said. “Europe will inevitably have to open its borders strategically. To guarantee economic growth, Portugal, currently with 10 million inhabitants, will have to attract one and a half million professionals. To attract qualified staff, Portugal has already developed specific and simplified visas, such as the tech visa, the visa for digital nomads, or the job-seeker visa.”
Pandemic and War in Europe
If the pandemic did not have the economic impact that was expected, Mr. Branco notes that the war in Ukraine turned out to be more impactful, particularly allied to the crisis of raw materials and components that have so affected industry – namely automotive.
“Inflation reached record levels of 10 percent in Portugal, with the economy forecast to grow by 0.7 percent in 2023 – the average in the European Union is expected to be 0.3 percent over the same period,” Mr. Branco said. “Consumer confidence indices will most likely fall, consequently slowing the economy and creating added challenges for organizations.”
Records for Job Changes
In 2021, records were set for job changes all over the world, and in 2022 a very significant percentage of workers remain open to new professional opportunities, according to the report.
Pedro Branco is the CEO of Portuguese boutique search firm Header. He is an experienced manager with a demonstrated history of working in the executive search industry. Mr. Branco is skilled in HR management and planning, negotiation, executive search, coaching and mentoring.
“In 2022, the Portuguese unemployment rate remained very low, below six percent, affecting mostly young people and some professionals who are not aligned with the market,” said Mr. Branco. “The low Portuguese unemployment rate, and the fact that many professionals have recently changed employers, which has made it very difficult for organizations to access talent in the market – favoring the use of talent resourcing consultancies.”
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All these circumstances bring opportunities and challenges to the executive search business, and it is uncertain whether the balance will be more positive or negative. “If, on the one hand, technology has made work provision more flexible and if the great dynamic in the market has brought new opportunities, the economic challenges – particularly inflation – may cause consumer confidence indices to fall, reducing consumption and, consequently, slowing down the economy,” Mr. Branco.
5 Trends to Watch for
We may not know how the economy will behave (impacts and duration), but Mr. Branco notes that there are some clear trends that will certainly impact the labor market and, consequently, the success and the way executive search operates:
1.Flexibility in the provision of work is no longer a benefit, a good to have, but a mandatory requirement for those seeking new professional challenges; in fact, most executive candidates do not give it up, according to Mr. Branco. In addition to attracting talent, this factor will be determinant in retaining it. For example, Mr. Branco explains that being able to work four days, in a hybrid or remote way and by objectives will have a significant impact on executives’ decisions regarding new opportunities.
2.Technology will have an increasingly significant dissemination and importance; inevitably, professionals who do not master it will see their potential market shrink significantly. “As far as executive search consultancies are concerned, although they will have to know how to evaluate these competences, they will also have to possess them, from the perspective of executing processes that are increasingly more evolved and digital,” said Mr. Branco.
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3.Risk aversion. Despite the growth of internal recruitment teams, supported by increasingly robust and efficient technology, the best organizations will continue to rely on competent consultancies specialized in the executive segment, according to Mr. Branco. “These teams are usually more inexperienced, and the impact on the business is too significant,” he said. “On the other hand, also due to the great difficulty in reaching the best executive candidates – who are not reactive to traditional methodologies.”
4.More women. Mr. Branco notes that the percentage of male students in higher education continues to decrease a little all over the world (46 percent in Portugal, in 2022, and there are countries where it is even well below 40 percent), gradually and positively impacting the number of women in the executive segment. “Although studies show that men are more power oriented, the increasing number of women in middle and top management positions will certainly balance the representation,” he said.
5.The candidate’s experience will be increasingly determinant in his/her decision to accept a new challenge. “In the demanding executive segment, in which the best candidates are highly sought after for new professional challenges, experience will start right from the relationship with the executive search consultancy and will have an impact – even if unconsciously – on the candidate’s decision,” Mr. Branco said. “A good candidate experience with the head-hunter will create more favorable conditions to say yes.”
“These are only five of the main trends in executive search for 2023-25,” said Mr. Branco. “Many others will exist, but perhaps with less significant impact or significance. It is also true that the market is very dynamic and increasingly unpredictable – not least because of the associated human factor.”
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Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media