I think it is fair to say that by the December mid-point everyone was absolutely exhausted and looking forward to a much-needed break over the festive period. For those able to switch off, it was a time to breathe, be with loved ones and maybe reflect (a little) on what a monumental year 2021 turned out to be for the governance market. A rebounding economy, resurgent M&A and IPO activity, record recruitment activity, shortage of talent and rising salaries underpinned a year where governance/ESG/Diversity & Inclusion rose steadily to the top of the UK corporate agenda. As reported at the end of the year we expected this trend to continue, so what has transpired so far this year?
Well, the high demand for governance professionals continues with particular emphasis at the Assistant and Senior Assistant levels. This is not confined to any particular sector but is unsurprisingly strongest within the highly regulated financial services, Pharma and Oil & Gas sectors. Of particular note however is the 64% increase in activity from within the online and bricks & mortar retail and leisure sectors which is encouraging. Interestingly, there has been a much stronger willingness amongst candidates to move into these sectors which demonstrates how these companies have not lost their allure despite the difficulties of the past 2 years. 80% of these roles are part of a strategic post covid ‘rebuild’ to bring much needed support within the governance function up to a sensible number and to relieve some of the pressure at Group level.
The issue of candidate supply at the mid-level is still presenting problems and will continue to do so for some time. Candidates are being approached on a regular basis about multiple opportunities with some saying they are beginning to experience ‘job opportunity fatigue’. It is increasingly difficult to differentiate between each role and many simply don’t have the time to properly consider each one and will switch off. To increase levels of engagement amongst passive jobseekers, recruiters are utilising ever more creative candidate attraction strategies. 95% of roles filled at the Assistant level are with individuals that were not actively looking to move…this is an amazing statistic that demonstrates how recruiters are adopting an Executive Search methodology which would not have been considered at this level just 3 years ago.
Group level appointments are down relative to Q4 2021 but this is a familiar Year End trend we have seen for the past 4 years. At the time of writing, we are in discussions with several companies spanning private/public/not for profit who are looking to engage with us for a Group level search starting in April so we expect Q2 to tell a different story. Deputy level hires remain at a constant to Q4 2021 with opportunities spanning all sectors. Whilst they are all attractive roles in their own right, Deputy roles always present a more challenging process for recruiters as getting the experience balance just right is key. This is wholly dependent on the status of the Company Secretary and the structure of the team below. Candidates must be experienced and ambitious enough to make an impact, but not to the point where they expect to step up into the no.1 role too soon. For those looking to step up from a Senior Assistant role, they face the challenge of being ‘untried and untested’ in the Deputy role. A classic case of ‘I need the job to get the experience, but I can’t get the experience without the job’. There also needs to be some ‘blue sky’ between them and the Assistant below them to prevent any responsibility conflict which in itself could lead to unwanted attrition. Whilst some companies are in a position to nurture ambition and talent, others are not in a position to take that perceived risk and will err on the side of caution by recruiting a seasoned deputy.
The professional services sector continues its incredible form and the larger consultancies are locked in an ongoing war for talent. Most accept the need to look beyond the merry-go-round recruitment of individuals from rival firms and are attracting talent from mainstream commerce and industry with attractive job opportunities and pay. There have been some high-profile lateral hires coming from the big banks and insurers over the last 6 months and we expect this trend to continue. At the junior end, some firms are opting to train and develop graduate talent, often seen as a less risky investment, but notably more time consuming from a management perspective.
We have also seen a notable increase in activity within the Not For Profit sectors who are doubling down on talent acquisition within governance, and in many cases attracting calibre individuals from the private sector. Is this the start of a longer-term trend, or is this a short-term reaction to personal self-reflection on the back of a difficult two years? We are not sure at this stage, but the data will reveal more over the next 12 months.
The interim market remains incredibly restricted with very few candidates available to fill maternity leave positions or support special projects. This has been frustrating for many employers, especially those that need the help to bridge the gap at a crucial time. Many are having to enlist secondees from their lawyers or outsource to a professional services firm, fuelling the demand discussed earlier. The most senior interim consultants are now charging up to £2000 per day for their services which remain in strong demand.
So, in short, the demand for talent remains strong and supply of quality candidates is falling which will inevitably have an impact on team dynamics and hiring strategies as the pressure of ever more governance builds. 2021 saw a strong rebound from what was a low base over 2020. The positive start this year is expected to continue but at a more moderate rate as the market normalises post pandemic.