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Q3 Executive Market Update - The bigger picture is changing...

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The bigger picture is changing…

What a difference a few months can make!

In my previous Q2 Executive Market update we anticipated that market dynamics are likely to change after a year which saw business confidence returning and opportunities for investment and growth rife across many industries.

Despite recruitment activity across Accountancy & Finance and Executive Markets remaining high, it feels like turbulence, uncertainty and cautiousness are starting to return, with disruptive market forces colliding from all directions - all having an impact on UK businesses’ appetite for taking risks and focussing on growth.

Inflation has just hit a 40-year high having reached double digit growth for the first time since 1982. FDs or CFOs are seeing the numbers on their invoices going up more than ever - be it raw materials, inflationary costs, labour or supply chain costs all playing their part.

So without wanting to be too gloomy about all this, the next few months are likely be an interesting and challenging period for UK businesses and their executives.  


The world of work

The world of work has been quietly going on its own journey amongst these changing market conditions.

An ONS survey recently claimed that 89% of adults have reported an increase to their cost of living in July, and the Bank of England expects post-tax income to fall by 1.5% in 2022. Some say this has given rise to new phenomena taking root within the workplace.

- ‘Quiet Quitting’ is a term recently used to describe how employees have adjusted how they work to address the balance between non-work life and work/life balance, by not going above and beyond expectations – or to put bluntly, doing the bare minimum in their job to get by.

‘The Great Resignation’ refers to the post-pandemic exodus of people leaving their roles, often having reset their personal and professional expectations from their own career. PwC’s Global Workforce Hopes and Fears Survey predicts that 20% of employees will have quit their job in 2022.

As 2022 progresses, the rising cost of living may present a paradox for those who have been looking to take the easy route in work, to now needing to earn more and push their careers forward to minimise the impact of lower disposable and household income.

How is this impacting the Executive market?

Management & Leadership

Never has the burden of management and leadership been greater. Managers are having to hang on to their staff for dear life against fierce competition, rising salaries and skills shortages – the same staff who are also now expecting greater work life balance, as well as higher reward.

In some instances in the last 6 months we have seen real live examples of people being offered salaries that are 50% higher than their previous role. We are seeing companies breaking their salary structure to attract the best people out there, such is the demand and shortage of people with the specific skills they require.

Whilst recent years have demonstrated that Executive Search and Accountancy & Finance sectors exist in a kind of ‘bubble’ within the market, able to withstand changing market forces, research suggests that C-Suite Executives and CEOs are not exempt from The Great Resignation.

A 2022 Deloitte study shows that around 70% of high-level executives are seriously considering changing roles for one with a greater work/life balance, largely due to help with their emotional well-being. 57% said they were fed up enough to quit and take a break.

Many executives experienced burnout from the pandemic and are now at the end of their tether. With the onset of further challenges down the road, this may mean decisions are taken by executives to move on from their post, or even take a career break altogether.

There will of course be others whose careers will be made over the next few months and years as they navigate their business through the upcoming challenges.


Market Confidence

There is a general consensus that we are likely to be entering into a recession in the near future. Even if we escape the technical definition of the dreaded ‘R’ word, as one CFO recently said to me, if people ‘feel’ like we are in a recession, then we pretty much are in one, as market confidence and hesitancy will be a likely outcome.

A Bank of England survey of Chief Financial Officers showed 63% of companies reported business uncertainty was ‘high’ or ‘very high’ in August. This is likely to have a significant impact on the appetite to invest. So as we head towards Q4 and early 2023, it does appear that we may be in for a rocky period of instability.

UK Businesses have endured a rollercoaster few years. As has happened throughout all turbulent times, the businesses who will do best will be those who are managing their short and long term risks, carefully proposing business plans, planning for a multitude of scenarios and preparing coherent contingency plans, as well as provide the best possible leadership to their employees, customer and clients.

Any business planning their next executive hire should be thinking carefully about the situational factors likely to be present in their business in short term, and recognise that what may have been right for the business last year, may look different for the next year and beyond.

The need for agile business leaders who are able to cope with a range of challenges with a diverse suite of experience will no doubt be required more than ever. 



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