January 18, 2023 – As executive recruiters, leaders at DHR Global are always asked what they see in the labor market. Right now, the search firm is seeing a lot. In late 2022, DHR’s resource group for women partners – called Global DHR Women – met and discussed their thoughts on how the current economic environment is affecting executive search, emerging leader search, and leadership consulting, with an eye on what challenges and opportunities might lie ahead. Founded and led by Jeanne Branthover, managing partner and head of DHR’s global financial services practice, the mission of the group is to help and benefit one another as well as to grow personally and professionally.
“From inflationary pressure on the economy to a fundamental shift in the way people work, all with continued uncertainty, hiring trends have been a hot topic of discussion and the situation varies widely by industry,” DHR said, in a report that shares insights from the Global DHR Women group proceedings. “To set the stage, many of the companies we work with vowed not to lay off workers during the pandemic. During the turbulent times of 2020 and 2021, companies were encouraged to keep employees with incentives like paycheck protection program loans. Some industries, such as airlines and hospitality, had major setbacks, while other industries, including gaming, technology, home delivery, online services, and pharmaceuticals saw continued growth.”
In 2022, many sectors surged back, despite supply chain issues, worker shortages, a down financial market, increased inflation to 20-year watermarks, and global conflict. The battle for talent was and is real, with not enough candidates for the open positions during the strong market and low unemployment.
Authors of the DHR report include: Ms. Branthover, Lindsay Bray Landsberg, Wendy Brown-Blau, Diane Coletti, Christine DeYoung, Sara Garlick Lundberg, Joan Gee, Kristi LeBlanc, Tricia Logan, MaryBeth Nicholas Cruz, Marcey Rubin Stamas, Bonnie Sharps, Jennifer Skylakos, Kathryn Ullrich, Lisa Walker, and Patricia Watters.
Over the past year, DHR says, the firm has been busy helping companies find talent. Yet, many people started to question the market and worry about a recession as the media began to report big layoffs of hundreds of workers at large companies. When partner Ms. Landsberg posted a survey on LinkedIn, 32 percent of the 300-plus respondents said they were hunkering down for a recession, while 36 percent thought a possible recession could be brief and mild. Nineteen percent said they would take a wait-and-see approach and 13 percent were optimistic and expecting growth. The majority of respondents said they had no fear that a severe recession would occur.
In tune with the survey results, the firm said, the Global DHR Women group isn’t seeing a notable slowdown among DHR clients. Companies hired during the strong market of the pandemic and over-hired as markets stabilized. Now, they may be alleviating the over-hiring by laying off lower performers.
Here’s what the women of DHR are saying about their sectors:
“Many companies are announcing layoffs, perhaps to right size after hypergrowth and limited layoffs during the pandemic,” said Ms. Ullrich, a managing partner in DHR’s tech-focused Silicon Valley office, and a member of the technology, professional services, private equity, and diversity practices. “In general, the technology industry has experienced incredible growth since 2020. As measured by Invesco QQQ, the market more than doubled at the peak at the end of 2021 and is still up more than 33 percent since the beginning of 2020 and 66 percent since the low in March 2022.”
“We see technology companies taking advantage of the current layoff notices to rebalance headcount and manage costs today with continued growth in the sector in 2023,” Ms. Ullrich said.
Automotive & Mobility
“Traditionally, automotive manufacturing is always one of the first bellwethers of an economic slowdown, and it’s been that way in Detroit for several months now,” said Ms. Watters, a managing partner in DHR’s Detroit office and as global leader of the automotive and future mobility practice group. “Seismic shifts are happening in the world of future mobility, however, creating opportunities for executive hiring to enable the new business and technology models that are unfolding. We remain focused on traditional and future mobility, although the normal flow of automotive searches has slowed, as we saw during past recessions.”
Consumer & Retail
“In a time of a projected recession, higher prices, rising inflation and continued interest rate hikes, the consumer and retail sector hiring is mixed,” said Ms. Landsberg. “Consumer spending in hospitality this holiday season is strong within travel as the consumer takes their COVID-19 postponed trips.”
Executive Hiring Predictions for 2023
With market uncertainty on the minds of senior executives as the new year has started, ON Partners recently asked its consultants to offer predictions and insights about the executive jobs they expect to be in demand in 2023. The past few years have seen one of the most volatile business environments in memory. Political, social, economic, health, and regulatory factors combined to form the perfect storm, creating a turbulent path for boards and those in the C-suite to navigate.
“Restaurants are back to full capacity but struggling with margin pressures and shopping at brick-and-mortar stores that have survived the pandemic have returned to pre-pandemic levels but lack the same inventory levels,” said Ms. LeBlanc, a managing partner of DHR’s global consumer practice group. “The growth of E-commerce during the pandemic has leveled off, but a seamless customer experience across all channels is expected including mobile commerce, and omni-channel shopping has become the norm.”
“The supply-chain issues that dominated 2021 and 2022 have slightly lessened but the geopolitical unrest has increased regionalization efforts that even the most sophisticated supply chain organizations struggle to address,” said Ms. Logan, managing partner and leader of DHR’s global retail practice. “Consumer brands are additionally dealing with soaring inventory levels and increased cost of goods, which is creating an opportunistic environment for the off-price retailers such as Ross, and TJX, and the Dollar Store channel. particularly as it relates to apparel with sales declining at furniture, electronics, home and garden, a reflection in the sharp decline in home sales due to increased interest rates.”
“Decision-makers within DHR consumer and retail clients are cautious in their hiring decisions as they assess the 2022 holiday season,” said Ms. Rubin Stamas, managing partner of the firm’s global consumer and retail practice group. “Monthly sales data in consumer and retail continues to be volatile with pockets of growth and a projected slowdown in early 2023. We hope this is short-lived and has created an unpredictable, hard to anticipate environment for consumer and retail.”
“Through the pandemic, financial services have shown the ability to navigate historic levels of uncertainty successfully,” said Ms. Branthover. “All sectors, including investment management, insurance, banking, and capital markets, demonstrated their ability for resiliency, adaptability, and empathy in a remote environment.”
“2023 will continue to be a year of uncertainty with global and domestic challenges, but savvy financial services leaders can continue to seize opportunities,” said Ms. Branthover. “Some firms will cut costs, but many others will develop strategies that focus on talent, technology, risk, regulation, and exceptional customer service. 2023 could be the year that the financial services industry defines the ‘new normal’ and the future of the industry.”
“The healthcare sector had serious strains during and after the pandemic, with increasing costs because of inflation, nursing and other workforce shortages, salary escalation, and impending workforce strikes,” said Ms. Gee, managing partner of the firm’s healthcare services and solutions practice. “Reduced revenue streams are adding to healthcare system losses in 2022.”
“In response to these losses, some healthcare providers have had to institute temporary hiring freezes on non-essential positions to control costs,” said Ms. Brown-Blau, managing partner. “As well, some health systems have looked at downgrading leadership positions to cut high-cost, nonessential employees. To implement this, organizations are spreading these employees’ responsibilities among other C-suite leaders or changing the criteria for positions.”
“Even so, the healthcare jobs market has begun to recover with employment down only 0.5 percent since February 2020, according to the Bureau of Labor Statistics,” said Ms. Cruz, partner, healthcare services and solutions. “From our viewpoint, the need for talent in healthcare remains strong.”
Healthcare Technology & Services
DHR Global’s healthcare technology and services practice had an active and successful year in 2022 and anticipates the same in 2023,” said Ms. Sharps, managing partner. “Some of the key areas of growth have been focused on companies providing data analytics and revenue cycle solutions which are providing immediate cost solutions for health systems and physician practices.” DHR Global has assisted these companies by adding talent across the executive teams, with a focus on CEOs, operation leaders, finance, and business development.
Healthcare service companies, focused on the post-acute markets such as home health and Hospice, experienced significant talent changes and expansions in 2022, according to Ms. Sharps. “The same sectors are poised to continue hiring executives with proven track records for driving significant growth,” she said.
“Enormous crosscurrents are occurring within the industrial sector: energy, agriculture, and other inflationary pressures; Baby Boomers retiring, with a smaller cohort of talent right behind them; supply-chain disruptions and responses; new competitive pressures from incumbents and new entrants; and updated or all-new business models to address each of these inputs,” said Ms. Walker, managing partner, global industrial practice. “This is a time of unprecedented challenges and opportunities in the industrial world. The winners can identify and execute on opportunities.”
“The pandemic obviously had a negative effect on the U.S. employment market at its height, but the life science industry continued to grow and remains strong globally today,” said Ms. Coletti, managing partner. “Life science experienced significant transformation in organizational planning and talent alignment for several years pre-pandemic. Advances in oncology, immunology, mental health and neuroscience have long contributed to the sector’s success. The pandemic then led to additional career opportunities to address the public health crisis.”
The market for executive talent in the non-profit sector remains tight, according to Ms. Garlick Lundberg, managing partner. “In the first year of the pandemic, we saw CEOs reassessing the strengths of their internal teams and a subsequent flood of inquiries for leaders with heightened financial and management skills,” she said. “As pandemic conditions evolved, the interest in management acumen continued, but we felt a shift toward growth, with a noticeable increase in demand for leaders who have fundraising capabilities.”
There’s no better time than the new year for employers everywhere to think about how best to meet the challenges of the months ahead. In a new report, Grace Blue Partnership offers insights into finding, keeping, and developing talent in these days of economic uncertainty, a stubborn virus, and change.
Ms. Garlick Lundberg says that facing increased demand for services, and with many buoyed by donations from billionaire philanthropist MacKenzie Scott, non-profits have been hiring executive talent like never before. “Demand hasn’t slowed,” she said.
Sustainable Infrastructure & Energy Funds
“Funds investing in sustainable infrastructure, energy transition and net zero/carbon neutral assets have been a relevant alternative asset class for several years,” said Ms. Skylakos, managing partner and head of the sustainable infrastructure and energy funds practice. “However, over the last few years, the sector has grown exponentially due to a collective global push to reduce the impact of climate change.”
Adding the war in Ukraine and the passage of the Inflation Reduction Act and the Infrastructure Investment and Jobs Act in the U.S., could lead to an investment boom. “This means the hiring of principal investment professionals, asset class specialist fundraisers and investor relations professionals, asset managers, ESG experts, and operating partners for portfolio companies, has been frenetic – especially across the U.S. and Europe,” said Ms. Skylakos. “Even with the recent decrease in deal flow, fundraising has remained robust, and so there are sizeable amounts of dry powder looking for homes. This mix can cause finds to explore additional asset types, risk-return profiles, geographies, etc., which leads to a need for more people. The overall takeaway is the sector will remain strong for the foreseeable future.”
“While all sectors are facing challenges, we see leaders taking advantage of the uncertainty to bring about innovation and growth,” the DHR report said. “Across the board, we welcome conversations with organizations and leaders who want to find winning talent, excel in the present, and build for the future.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media