HUMAN RESOURCES

The war for leadership talent

Are we winning the war or losing the battle? Toni Hall and Julie Towers share their experience as the pattern of leadership recruitment within the sector ebbs and flows

Are we winning the war or losing the battle? Toni Hall and Julie Towers share their experience as the pattern of leadership recruitment within the sector ebbs and flows

As 2024 is Penna's 50th birthday year, we have naturally been doing lots of reflecting about the last 50 years, as well as looking ahead at the talent issues that affect us as recruiters.

Recruitment is often the most predictive barometer of the economy, always first into a recession and last out as organisations hold recruitment back, don't replace leavers, freeze vacancies, or recruit themselves rather than use consultants when times get tough.

In the later months of 2023, when the UK was formally in recession, we were anticipating a tough 2024.

We knew there was a busy political calendar – with local and mayoral elections and (maybe) a General Election – and these affect the public sector plans enormously, with purdah periods and the elections a focus we expected that recruitment demand would decline or be deferred.

This on top of the increasing financial pressures were clear signals that investment in new or replacement roles would be impacted.

So, what has been happening to leadership recruitment.

Data from The MJ shows that in 2022 there were 768 roles advertised with +£75k salaries.

In 2023 this reduced by 29%, and if 2024 follows the first quarter this will be 46% down from 2022. Despite this, place leadership roles have remained in the highest demand.

The decline in demand for senior leaders is no doubt in part due to a much needed ‘settling down' post-Covid; signalling a more stable workforce, fewer resignations and retirements, and less job hopping as the agile working requirements achieve a new norm.

But could funding challenges be pressuring capacity and capability? At a time when local authorities need all the creativity and innovation possible, its ability to invest to save and invest to reinvent will be hampered if there isn't the capacity and capability.

At times like these its therefore encouraging to see a little more creativity in organisational design, with councils merging roles, sharing, and partnering to find leadership solutions that bring synergy and cost reduction – is quality not quantity the focus?

In our professional recruitment reflection pieces in The MJ over the last few months you will have read insights into place, social care, finance, public health, and HR/OD markets. But what is happening when it comes to the top job?

53% of chief executives have only been in post since the pandemic.

The highest level of change we have seen since 2010. It's perhaps not surprising with the bonfire of resignations, burnouts and retirements, a considerable number of Section 114's leading to departures and increasing intervention creating change.

But can we afford to waste and lose talent at this rate at this level? The cost of hire and fire, the impact on organisational culture and performance and the reputational damage – individually and collectively needs to be considered.

The tenure of chief executives in the public sector has often (and not positively) compared with those of football managers!

The good news is these challenges do not seem to be putting leaders off the role, and it's clear that local government, post pandemic has some of the most challenging contexts to solve and many opportunities to maximise, and the public purpose mission and ability to change lives remains appetising to future leaders.

Our aspirant chief executive programme has been oversubscribed for the last two cohorts and the support and succession planning considerations in authorities improving.

It is also encouraging to see the launch of IGNITE – the new Solace and Local Government Association leadership programme – to empower local authority chief executives to elevate their understanding of their roles in an ever-complex environment.

Supporting future talent into and within their leadership roles at this level is key to ensuring authorities are soundly and consistently led.

The background of current chief executives also shows a link to the growth in demand for place leaders – with 39% of chiefs having a place background. Is this a nod to the increasing whole system, place leadership of local government?

Are we surprised that 15.8% of CEX's are from finance at a time of unprecedented economic challenge? And isn't it good to see public health leaders taking on the top job having shown their incredible strengths and values during the pandemic?

Does professional background matter?

One thing that hasn't changed significantly is pay – with the market stabilising on chief executive pay and better reconciliation between London and the regions.

All of this has increased the consideration candidates place on the context of the authority, the politics, the finances, the commitment to change and the stability and confidence to enable transformation.

There's rightly, increased interest in the context, conditions and culture of the authority, the key politicians and manifesto – not in a political way – but to get a sense of how able they will be to deliver and make change happen.

Ambition and reality are being tested to the full through the process. This demands more interface, connectivity and input from an authority and its hiring leaders and those that invest are making more considered and thoughtful appointments…that we hope will stand the test of time and challenge.

The demand for interim chief executives

Demand for interims has followed the market downturn as authorities look to reduce agency spend and place permanent leaders. The year 2023 was 25% down on 2022 and 2024 has started at a further 25% down on 2023.

In the decade before 2020 and Covid, there were few requests for interim chief executives. Most local authorities filled the gap with acting up arrangements.

Then Covid hit and there was no extra capacity, causing a spike in requests for interims. The 2024 landscape has the potential to create a similar spike (elections also often create turnover).

Hopefully with increased focus on succession planning, local authorities will have the internal talent to ‘act up' and reduce demand for external interims, but if not rest assured that there is a good supply of talented chief executives who have moved to interim since Covid.

Toni Hall and Julie Towers are directors at Penna Executive Recruitment

www.penna.com

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