MEDIA & INSIGHTS
Today’s gold rush – structuring talent and reward as the talent bubble bursts
In the early 19th Century the ‘gold rush’ saw a rapid influx of fortune seekers to the sites of newly discovered gold deposits, the earliest being in the United States.
Today’s ‘gold rush’ has seen a rapid influx of tech start-ups and talented tech wizards to hotspots in the US, particularly Miami, FL. Pent up private equity capital flooded into hyper-growth tech companies following the pandemic years as entrepreneurs couldn’t hire talent fast enough to deliver on high growth objectives and promises to investors.
Then the market almost skidded to a halt. Inflated salaries, rising interest rates and the escalating cost of living has led to companies such as Meta firing another 10,000 employees having just reached a headcount of almost 30,000 between 2021 and 2022.
In this ‘market correction,’ inflated salaries are now unaffordable, and a disconnect has appeared between people, performance and value. Valerie Derome, Senior Vice President, Leadership Advisory at M SEARCH explains, “A lack of strategic talent planning has resulted in expensive super performers brought in as a ‘band aid’ doomed to frustration and stress, when what the organization needs is a comprehensive review and reset around strategic talent”.
A feeling of ‘everything everywhere all at once’ is leaving business leaders reeling as they strive to understand how to manage another hiatus in the workforce.
“This is not just happening in the tech sector,” comments Tina Engineer-McRae, Founder and President of M SEARCH. “We are seeing this across the board as the market adjusts to a new reality. This is leading to extreme caution in hiring, as ‘rockstar candidates’ are made to jump through multiple hoops and companies are no longer willing to engage in a talent auction”.
It’s a major U-turn, with an enormous amount of displaced employees scrambling for killer jobs; companies no longer have to jump the highest bar to woo talent. The challenge now is to understand an individual’s value in the context of the organization and the market; who will fit a changing culture; and how they will fare in the next market correction.
This is made harder by the fact that a lot of hyper growth companies didn’t have HR and Talent expertise, or if they did, it was unfortunately cut as a cost center, which has proved extremely costly in itself.
Organizations are now in a rush to access HR and Talent expertise. For some, fractional leadership – a part-time, short-term C-level expert – is the solution; for others, specialist consultants are the answer. Who are they and how can they help?
Our leadership advisory team has consistently expanded its services to help clients navigate this market. “We engage as the (?)Chief People Officer for a number of clients who have a broad range of needs. We enable them to understand their capability gaps in context, create a plan and process around them and manage the impact of a bursting bubble,” explains Valerie.
“For early-stage companies,” Valerie adds, “bringing in a strategic Head of People is not on the budget nor the agenda for another few rounds of funding. We then need to work with those companies’ leadership to create foundational practices and behaviors, and embed those in their leadership success model. For one of our clients, a niche consumer goods company, we have established HR processes, structures and protocols to create a platform on which to build the right team.. We have also put in place a mechanism for regular talent reviews to identify and reward high performers who will move the company forward, the strong pillars, innovators, and implementation drivers. It is crucial to have a good mix on the team. Then in time, we can find the right Chief People Officer to leverage what we have put in place”.
With such a rapid adjustment both internally and externally, organizations need a more intentional, planned approach. An integrated leadership advisory and search solution can provide a holistic, longer-term approach that is grounded in robust planning and processes. Valerie concludes, “For the greatest intangible in your business – your people – you need more process and intentional thinking to reconnect people with performance and value, so you can hire the right people with reward linked to outcomes rather than froth in the market”.
Valerie Derome is head of M SEARCH’s leadership advisory services. She was previously Senior VP of Talent and Leadership for REEF Technology and Talent Development Lead for Apple in Latin America.
She delivers bespoke programs in talent organization effectiveness, people capital, and culture. Specific engagements include building talent capability; reorganizing structures from product-led to people-led; constructing talent acquisition teams, approach and process; acquiring the right technologies to support the people function; developing authentic leaders and embedding a culture of belonging.
Tina Engineer-McRae is the Founder and President of M SEARCH and an acknowledged expert in strategically partnering with clients to acquire the best leaders for corporate functions, notably human resources, finance, operations, sales & marketing. Her exceptional eye for recognizing best in class talent has allowed her to engage dynamic leaders, who enable organizations to transform and rapidly scale. She previously worked in the UK with the world’s largest provider of HR solutions, and spearheaded the growth and acquisition of a leading South Florida boutique recruitment firm.