My world: June 2021…
This is part of a series of articles where our contributors describe how they think things will look a year from now.
With business needs changing, companies may re-evaluate the fit of their managers and non-executive directors
Last week, the chief financial officer of a FTSE 250 business told me they had completed the hiring process for a new director within four days. The candidate was referred to them, and rather than wait for the pandemic to pass, they struck while the iron was hot. A series of Zoom meetings, an offer accepted, and contracts signed without a wet signature. The candidate hadn’t met anyone in person or visited the company’s offices. No corners were cut in the process – the business adapted. Smart recruitment, I’d say: good use of technology, and an individual with valuable skills is off the market. The competition didn’t get a look in.
Conversations I’ve had with a range of real estate clients over the past few weeks have been interesting and varied, though they have probably raised more questions than answers. Here are some of the common themes:
- Will remote working one or two days a week be less of a perk and more of a necessity in attracting and retaining talent?
- Might we see more senior people take early retirement, now that working from home has given them time to evaluate what is really important to them? Some may not have the appetite to battle through another downturn. Succession planning may become more of a priority.
- Businesses are likely to re-evaluate their current people. Some individuals, while not exactly failing, are not leading the way and companies can’t afford the cost (or the damage to morale) of carrying such people in difficult times when everyone is under increased pressure. It affects morale.
- As board disagreements regarding strategy increase, businesses are also re-evaluating whether they have the right non-executive directors to guide them.
- Virtual conferencing platforms such as Zoom are working well for many, who find them more concise and quicker. One client found that holding a board meeting virtually reduced it from eight to four hours.
- Change projects are likely to be accelerated, and businesses may need experienced interim advisers to help with that.
- People are also wondering whether their own role is likely to change much within the next year. To that, I’d say the answer is generally no.
There is so much speculation and opinion (little of it fact-based) at the moment, and it will take at least a year to see what becomes reality. However, I do expect to see more demand for non-executive directors in particular, as they can offer a more neutral perspective on board decision-making than may be possible for management. The latter are likely to be immersed in solving the daily emerging problems, whereas non-executive directors can keep in mind the organisation’s ultimate purpose, its values and the likely impact of decisions on a broad range of stakeholders.
It may be harder for businesses to source replacements at senior level, as the better potential candidates find themselves taking on renewed importance in their existing roles. Loyalty becomes more of a factor in a crisis, and companies are not going to want to see their top people leave. Counter-offers may become more difficult to refuse. This may increase the need for interim skills.
This year, the oldest millennials in the workforce will be turning 40, and the brightest of them will be heading towards senior roles. Meanwhile, the Baby Boomer brain drain will continue unabated as many of them will have retired (and be in high demand for non-executive director roles). The millennials have different values and are more tech savvy.