Archives for October 2021

According to the UN’s International Labour Organization (ILO), Covid took 225 million people out of the global workforce last year. That we understand.

This year we saw a new twist. In the US, 20 million walked away from the job they had, joined by millions more in Europe, Latin America and China. It is the year quitting became honorable. Covid and its resulting stress no doubt play a role but this message is more personal: “I’m in the wrong place.”

Are recruiters a part of the problem? Today’s professional is increasingly absorbed in ensuring the fit is optimal between the job and the job seeker. Did they get it wrong – 20 million times? An understanding of the recruiting industry would say no.

The recruiting business divides naturally in two depending on outcomes. One pursues lower levels of employee and middle management. It is being transformed by technology that aids in the identification, attraction, engagement, and nurturing of candidates into applicants as rapidly as possible.

The other half, often described as executive search, concentrates on high value leaders and managers. Since these represent critical and costly assets to the employing company, there is more personal involvement. The search process and the skills required to conduct it, are many times more complex. 

They left miserable jobs

Most, if not all, the resignations come from the first group. The majority of quitters (they are actually labelled “quits” by the US Dept of Labour) left miserable jobs in miserable front-line sectors such as health care, restaurants and food services where they worked long hours for sub-standard pay in highly stressful and often abusive environments. (Servers working for tips can be paid as little as $2.13 an hour in wages)

These are jobs unlikely to attract more than a resume submission from a recruiter. Deep background and compatibility checks are absent. So the extraordinary level of dissatisfaction cannot be laid at the recruiter’s door

But if the hiring process has little to do with where we are now, it is likely to have a greater impact on where we go from here.

If you think of the Great Resignation as a cry for attention, you would not be wrong. But that cry comes from a wider source of frustration than just the abused front-line workers. The face of work has become increasingly impersonal and the attitude of employers (and most recruiters) has been one of: ”This is the job. If you fit it, we’ll look at you”

Job seekers want more 

This year has told us this is not enough. Workers, especially the young, want more than just a paycheque for spending half their life in your service. They care what you do with the labour they are giving you. They want you to share their social concerns – for the environment, for the less fortunate, for equality of opportunity.

They view mankind as custodians of the welfare of the world we live in and want you to play your part.

Perhaps this is the idealism of the Sixties working its way through the fabric of society. Whatever the source, it is here and changing the employer-worker relationship in a profound way.

The restoration of the individual impacts both sides of recruiting. The volume merchants will continue to benefit from AI and best-to-fit technologies but will need to bulk up on more personal treatment of candidates. They will have to learn to listen.

The executive searchers, too, will have adjustments to make. They must look more closely at leadership profiles in search of empathy and a heightened sense of talent management. Team building abilities have always been high on the chart but now may have locked in first place.

Let’s blame Covid

Incumbent leaders will be forced to reflect. Reportedly, some senior managers do not believe the massive turnover is a matter of significance but regard it as an anomaly related to the pandemic. Some are unaware of the culture experienced by workers in all parts of their organization. They assume that since their own relationships are collegial, the same is true for all employees.

Leadership candidates hopefully will reach a more responsible conclusion – that the working environment is deficient. Employees walking away from a job without another one to go to are voting with their feet.

Both the candidate and the executive search professional will be looking harder than before at non-financial criteria — the quality of the current management, the company culture and the company mission, or purpose. Financial success and stability will be dependent on getting these right first.

Work has been a major part of most people’s existence for hundreds of years.

As the face of work evolved – faster, more complex, more stressful, less fulfilling – the idea of work-life balance became a dominant proposition. Or it did.

Three outcomes of the global pandemic have kicked it to the curb.

First was labelled the Great Recession in the U.S., where the pandemic triggered the sharpest economic contraction in modern American history. In the second quarter of 2020, GDP shrank at an annual rate of 32.9%, nearly four times the worst quarter during the original Great Recession.

Then we had the Great Vanishing Act, when the US labour market lost more than 20 million jobs in one month in 2020 – and still has not been able to find seven million of them.

Now, we have the Great Resignation – a stubborn outflow from the workplace different from the 2020 exodus by being of choice. For the last four months in a row, a record number of Americans have quit their jobs – around 4 million a month or nearly 20 million between April and August, more than 60% higher than a year ago.

The phenomenon is global but differs in nature in North America. Elsewhere, the causes of job loss tend to be economic and with limited, if any, options. In the Americas, it is very much more an expression of “take this job and shove it, I ain’t working here no more”.

The Great Resignation is the phrase of Anthony Klotz, a psychology professor at Texas A&M. Klotz recognized early the emotional impact of the massive layoffs as businesses struggled to survive.

From organizational research, we know that when human beings come into contact with death and illness in their lives, it causes them to take a step back and ask existential questions,” says Klotz “Like, what gives me purpose and happiness in life, and does that match up with how I’m spending my time right now? So, in many cases, those reflections will lead to life pivots.”

So instead of a Great Resignation, what we are really looking at is a Great Re-think of the role work plays.

The desire to pivot did not arrive overnight. According to Tara Sinclair, a senior fellow at the Indeed Hiring Lab, this desire for flexibility and autonomy was already on the rise pre-pandemic.  But it wasn’t until the pandemic hit that employers began to embrace the technology that enabled employees to work from home.

“We all know this technology works now, so that genie is out of the bottle,” she says. “And I don’t think either the employer or the worker wants to put that genie back in the bottle.”

In other words, after over a year of disruption, people in the workforce this year have become reflective of their life and career and their jobs. And with over 10 million current job openings and widespread employer acceptance of remote and technology-assisted work, if you want to go do something different it’s not terribly hard to do.

The “shove-it” momentum has been prevalent in the healthcare, retail and food service industries which for years have been characterized by low wages, long hours, everyday stress and limited fulfillment.  These sectors are among many that will undergo significant change in order to face the new challenges of retaining and maintaining a productive workforce.

Next week we will take a look at a pandemic outcome that has not yet hit prime time: the impact of this workforce reset on talent management, recruitment and organization.

Last year we published four articles on the Cornerstone Global Blog detailing the harsh realities of finding exceptional leaders for a private equity portfolio company.

The series went into seldom discussed detail of what makes this such a challenge, and how the investor-owner structure creates unique pressure points and challenges in the leadership process.

The articles were written by Steve Manning while with Cornerstone Singapore.  Steve has moved on and Singapore CEO Edwin Yeo has spearheaded an initiative to collate and publish the articles as an e-Book with Cornerstone Marketing.

The title – “The Toughest CEO Search of Them All” – reflects the gritty, down-to-earth content that reviews a long list of challenges, seen and unseen, that stand in the way. The book is filled with hard-hitting advice that you are only going to get from someone who knows PE and has lived the journey.

It puts you in the position of the lead investor seeking to replace or upgrade the senior management team you just acquired.  Here’s how the book opens:

The dynamics at a PE firm are fast, aggressive and all conquering. As the investor leader at a newly acquired portfolio firm, you’re thrust into the position of tackling senior leadership management issues.

The bar is set shockingly high. According to a 2017 survey, 58% of Private Equity CEOs are gone in two years.

You know what you need. You can visualise what the next CxO team will be like, and what they need to possess in terms of experience and capability.

And you are in a hurry. You didn’t buy a $2bn company expecting to lure the right people over time. You want to move quickly.

But in-demand executive talent is scarce and hard to attract. You want to move fast, but you need to move wisely. The 58% came from impressive backgrounds with the first-hand experience that made them seem like a good fit.

It’s intuition you are looking for, not fancy excel models. And a leader develops intuition only once he or she knows an industry inside out, and that takes time. So yes, it’s a tough job.

The book makes it clear that under all the multi-faceted mayhem that surrounds a PE portfolio acquisition, the leadership vision and execution remain the most important factors:

“There comes a point early on when you want to take stock.  You’ve provided capital surety it is now only people that matter.

“Only people?

“How you act with management selection will determine your success.”

There is no charge for the book and it is available in several formats.

• You can read it online as a flip-book 
• You can download it as a regular PDF 
• You can share it with others as a link. https://www.cornerstone-group.com/pe