It is not an exaggeration to say that the past few years have been very challenging. The economy turnaround began as “the jobless recovery” and, as a result of diminished growth, the needs for key executive talent has lagged. 2012 in the U.S. should continue to see a slow recovery with an increased need for key talent; companies can only grow as a result of their human capital. Short of an overwhelming crisis with the euro, U.S. businesses should see an increased need to strengthen their executive talent.
Amrop Battalia Winston’s industry-specific practices have experienced varying degrees of growth over the past year. One of the areas with a high rate of activity is health care, predicated on the development of new technologies and service delivery systems, and clearly the upgrading of talent and service. The industry is showing signs of significant growth in hiring at the executive level. Key to any and all of these opportunities is being viewed or identified as an innovator and change agent. The growth has been spurred in many cases by regulatory and consumer demands and the resulting positions are often newly designed and created. These positions require some specific skills, but to be successful in most cases, candidates must be able to demonstrate creative and innovative ways to use their knowledge and ideas to supplement specific skills that will assist organizations in their response to new demands. For example, value-based purchasing is driving the need for Chief Patient Experience Officers who will not only measure and report retrospective patient satisfaction data, but who will design and implement innovative ways for proactively improving the entire patient experience and transform organizational culture.
The Consumer Products and Retail sectors are experiencing different scenarios of growth. Consumer packaged goods companies, especially food and beverage, have been going through a strategic consolidation and pruning of their product portfolios. For example, P&G selling Pringles to better focus on household and beauty products; Ralcorp acquiring Post Cereals from Kraft a few years ago and now spinning off Post; Sara Lee selling off non-core brands and splitting the company into two separate businesses for meats and bakery/beverage; Kraft selling their frozen pizza brands (Di Giorno, Tombstone, California Pizza Kitchen) to Nestle Products. This activity suggests that the industry remains healthy and is growing by accretion, as much as by product development, and should present a vibrant search environment for regional and national companies. This opportunity seems to hold true for the wine and spirits industry which is rebounding nicely.
Retail companies, on the other hand, are treading water. Small incremental, same store sales growth is symptomatic of the economy. Major retailers, like Sears, have announced large-scale store closings. Search opportunities in this sector will be opportunistic when executives are relieved of their duties, more so than by organic growth.
Our consumer, media and technology practice continues to thrive with the challenges of new technologies. We have worked closely with these companies in incorporating key talent that can look forward to the future as digital technology continues to play a key changing and challenging role.
While 2010 and 2011 left a black cloud over the Life Sciences industry, primarily as a result of layoffs, 2012 should see a reinvigoration of companies’ focus on core talent. Organizations will hone in on securing, developing and retaining key individuals, with an increased emphasis on leadership skills. No longer will people be promoted by “simply being there long enough” or because of a unique technical background. Innovation is the buzzword in the industry and innate leadership traits and behaviors leading to innovation will be closely measured to hold people accountable for impressive results with less resource. Moreover, with imminent challenges such as underperforming pipelines and patent expirations becoming more of a pressing reality for traditional players in this space, companies are beginning to embrace emerging technological advances to bolster their R&D efforts as well as give them greater access to patients who struggle with their own issues such as disease management, medication compliance, etc. In terms of hiring trends, the use of executive search will be very selective for many companies as they look to promote from within and develop internal talent. Until confidence in pipelines builds, a “holding pattern” appears to be the norm regarding head count.
The Industrial Sector all but shut down in the fourth quarter of 2008. The only hiring that occurred in 2009 was reserved for the most critical positions that impacted the bottom line. In 2010 and 2011, companies focused on replenishing inventories depleted during the downturn and producing positive earnings for their shareholders. This period also saw some improvement in executive hiring, but it was still generally limited to filling key leadership positions, not necessarily creating new positions. Companies were hesitant to make investments in human capital mainly due to the uncertainty of the U.S. and global economies. In 2012, we are hearing more optimism from organizations in this sector. For example, the automotive industry is on the rebound and those organizations that supply this industry will begin to feel more pressure to address their hiring needs or risk falling behind the curve. Organizations cut so far back during the period of 2009 to 2011 that they now realize they must begin rebuilding their human capital or run the risk of not being prepared when the economy rebounds. Conversely, there is strong pent-up demand among all levels of employees. Retaining key leaders will become another challenge for corporations. We believe 2012 will be the watershed year where companies become more aggressive in hiring while at the same time employees will be more open to a job change.
Our not-for-profit practice continues to grow, driven by the organizations’ need to be more organized and principally run as businesses. This is another area where growth is being driven by regulatory and consumer demands, prompting the creation of newly designed positions. Another interesting phenomenon we recognized in 2011 was the numerous retirements of long-term CEOs who had served in their positions twenty, thirty or more years. Some stayed in those positions longer than anticipated due to economic conditions that saw many Americans delaying retirement if they possible could. Others stayed because they and/or their Boards were unable to conduct a search for a replacement in such uncertain times. Now, the need for talented individuals to assume the leadership of these organizations has never been higher. Lastly, technology decisions and investments, which many organizations delayed for economic reasons, are now moving forward and the wide range of individuals to lead and/or assist with technology initiatives is exploding. But once again, any technical skills just won’t be enough. Skills must be coupled with innovative ideas, cutting edge approaches and the style and personality to be a successful change agent.
Our Diversity & Inclusion practice remains a strategic area of growth for our organization. Our team is in demand to share best practices and trends seen in the market in regards to recruiting and retention. Larger corporations have grown increasingly aware of the business case for diversity and inclusion. Yet, the statistics remain extremely low when counting the number of U.S. minorities within the executive ranks at these same organizations. As a result, our team focuses on building customized strategies for our clients to grow diverse talent in the leadership pipeline for these clients.
Having been in the executive search business for several decades, we have seen our profession evolve. While executive search consultants have always strived to be the trusted advisor, there is a growing emphasis on the need to be industry specific and capable of developing assessment tools and methodologies to align executive slates with a company’s culture and values. With an all-encompassing recovery on the horizon, Amrop Battalia Winston is poised to meet the growing demand for human capital across a broad range of industries. We have weathered good and bad economic storms in our 50-year history and remain dedicated to providing the highest level of Executive Search, Leadership Assessment and Board Consulting services to our clients.