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What are the next executives challenges?

Lack of diversity, lack of key leadership successors and competition for talent. This are the top three challenges in the survey conducted by AESC and published exclusively in the volume seven of Executive Talent – Especial Edition Report. The company developed a deeper understanding of cliente relationships – surveyed 190  and interviewed a further 25 clientes around the world.

They started by asking about top challenges inform the use of external advisors. As quoted, “lack of diversity” is the number one challenge clients are facing today, perhaps due in part to continued government pressure in many countries around the world. Importantly, it’s 2016 and businesses finally understand the value that diverse leadership plays in driving innovation and business results. The executive search and leadership consulting profession can have a profound and lasting impact on their clients’ business by helpping clients create a culture of inclusion and innovation and finding the best talent worldwide without bias. In just five years, clients rank this challenge much lower, so we can only assume that they finally, perhaps optimistically, see the light at the end of the tunnel in terms of benefiting from diversity  in the leadership ranks, on boards, and with their total workforce.

‘Lack of key leadership successors’ and ‘competition for top talent’ are also top challenges that clients are facing today and presenting  more  areas  where  executive search advisors can continue to provide value. Another  answer   that   received   significant responses was ‘mismatch  of  current  talent and future  strategies,’  which  also  ranked  as the top area where clients would use external advisors today ,  showing  that clients appreciate the strategic value that external consultants provide.

The  number  one  issue   forecasted   in five years: aging demographics. Clients clearly look at their  current  senior  talent and worry about what happens when so many retire. Coupled with future concerns about globalization and competition for top talent, it’s no wonder that succession is a critical issue today.

‘Competition  for  talent’   ranked   in   the top three both times, indicating the clear recognition  that   identifying   and   attracting the right top talent is critically important to business success. Clients value the use  of outside advisors today and in the future to help them with their most critical executive talent strategies, including succession planning and the search for the right top talent.

In relation to the use of external advisors, only one of the top three responses changed: ‘globalization’ topped  the  list, while ‘mismatch of  current  talent  and future strategies’ fell away in significance. These results show that clients  are optimistic  about  the  initiatives  they   are prioritizing (diversity, aligning business and talent strategies), and  their  concerns  for the future are at least partly based around concerns for megatrends (globalization, demographic shifts) which will pose a new set of challenges.

While these questions speak  to  the trends and concerns that clients are facing, we also wanted to gain insight into the external services that they  currently  use and expect to use in the future. There  is  demand  today  from more  than  68%  of  clients  for  seven  out  of the ten services listed, indicating that there is clearly value in the use of external consultants  for  executive  talent  solutions. All three of the service areas where there is less demand currently  succession planning, leadership effectiveness, internal talent assessment, increase in expected future demand. This is in line with the areas in which AESC members expect to see an increase in the future, demonstrating that executive search firms are broadening their service areas based on client  demand.

Clients are already retaining outside advisors for: executive search, strategic planning, interim management, executive coaching, compensation strategies, organizational effectiveness,  board advisory services, succesion planning, leadership effectiveness and internal talent assessment. Interestingly, three  of  the  four  least used services today have moved up to  the top three positions forecasted for use in five years. Executive search dropped to the sixth position, indicating the client’s desire to do more work in house  in  this  area,  however the  percent  is  still  strong  and  is  forecasted by many to remain  the  same  or  increase.

While there is  demand  for  executive talent solutions from external advisors, are executive search and leadership consulting firms well placed to provide the services? We asked clients which additional advisory services they would use executive search firms for today and  in  the  future.  The   “maybe”   category is the most telling: 30 to 46% of clients indicate they are open to using their current executive search firm for this broader range of advisory services in the future. We can only  conclude   that   the   value   provided in  terms  of  deep  industry  and functional knowledge combined with achieving the status of being “trusted advisor” on top of executive  talent  issues  encourages  clients to think, “how can we partner with our top executive search advisors more broadly on our top talent challenges?”

By combining the ‘yes’ and the ‘maybe’ responses, we can see that there is a real opportunity  for  clients  and  executive search firms to partner together on a broad range of leadership services that focus on executive talent strategies. In seven of the nine services, at  least  66 to 79%  of  clients  are open to working with executive search firms, and in  all  but  one  of  these  areas the future interest increases  even  more. This shows the natural chemistry between executive search and the leadership consulting services listed. Many executive search firms are already partnering with their clients in these areas, and we expect  to see this grow in the future.

 

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