Executive Leadership Archives | Kathy Freeman Company | Executive Search

Talent Strategies for an Uncertain Time: Timely Insights Field-Tested by Senior Leadership

Kathy Freeman Godfrey April 13, 2022

I recently had the opportunity to connect with senior leaders from the investment industry to discuss human capital. In a large group forum, we addressed the extraordinary challenges firms are facing as a result of the Great Resignation, along with the difficulty of reintegrating and engaging people back to the office after two years of remote work. The criticality of the topic led to a dynamic and exceptionally productive conversation.

It was great to hear that many firms have refreshed their leadership playbooks to develop new and creative solutions to engage and retain talent. The dialogue was so compelling that I wanted to share several of their insights to encourage change, where merited. We had polled many of these same leaders in Q4 2021 on similar issues, and those findings are published in our 2021 Talent Trends Report.

#1: Increasing Transparency is Driving Leadership Change

Becoming an attractive destination for great talent in an increasingly transparent world means firms are under pressure to rid themselves of toxic leadership. It’s no longer a secret if a management team is perceived poorly. Glassdoor.com and many other sites rate a firm’s management and culture in real time. With many firms struggling to attract and retain talent, no one can afford multiple negative reviews nor the slide toward a poor reputation. Winning firms are being more decisive and less tolerant of leaders who don’t build out the skills and abilities of their teams in a positive manner.

Firms motivated to enhance their reputation to attract talent are investing in more constructive leadership programs. One idea mentioned in our leadership forum was an internal advocacy program to connect Next Gen talent with senior leaders. This is highly effective. Mentorship and exposure to senior leaders sends a strong message that up-and-coming talent is valued and that their leaders are champions of their success. Leaders who promote candid dialogue, offer guidance during difficult career decisions, or help individuals navigate complex conversations, are well-received by employees. These conversations can travel beyond the four walls of your organization and enhance your brand.

Leaders keen on focusing on the vital human dynamic lost or damaged during two years of remote work are also instituting “buddy programs” for new hires. These programs typically work by pairing a new hire with an existing employee who can show them the ins-and-outs of the company. The new person will have a much better opportunity to understand and integrate into a company’s culture, their political landscape, and be included in social activity or dialogues with the help of a firm veteran.

#2: In the Midst of a Talent Shortage, Firms are Being Intentional to Highlight Internal Opportunities

Firms successful in talent development and recruitment today are helping their people realize what opportunity exists at their own firm, rather than watching them walk out the door. These firms encourage career and personal growth by fostering exploration within their company. By contrast, firms that don’t open doors elsewhere in their firm, even for their best performers, risk losing these employees altogether.

Another facet of the same idea is internal “internships.” Some firms have created a path for an employee to shadow other employees to get a better feel for different functions and divisions within the business. Allowing people to gain greater clarity about the work performed by other parts of the business can lead to cross-pollination of talent. Even more importantly, it can create a greater understanding of each department’s contribution to the company’s mission and success. Internal internships are being leveraged as a tool to help retain employees. This approach can be another selling point in employee recruitment efforts as well.

#3: Enhancing Employee Engagement Requires More Interactive Communication from Leaders

To facilitate transparency, empathy and engagement in field-based sales organizations, some leaders have initiated “Listening Tours.” These internal roadshows allow leaders to engage with small groups of employees in different geographies to solicit their feedback on a variety of topics. The goal of these candid conversations over several months is employee-inspired action plans that can be deployed in various ways. Not only does this kind of active listening foster positive change, but it also motivates teams to buy in to the implementation of the proposed ideas.

While most firms are bringing their employees back to the office on a hybrid schedule, there’s an opportunity to complement these face-to-face meetings with other more personal engagement. To strengthen a firm’s social fabric and create collegiality, some leaders have been creating a team newsletter online to discuss hobbies, children, vacations, sports, March Madness picks or Fantasy Football teams. Posting pictures akin to an Instagram feed are avenues for building connectivity specific to a team or business unit.

The Bottom Line

As the Great Resignation continues, it was encouraging to hear these industry leaders have pivoted and built defensive strategies to retain and develop their talent. The labor shortage, which isn’t going away any time soon, has demanded that leaders step up their game. They need to focus on team building and engagement to be an attractive destination for the limited talent that’s available. It was rewarding to facilitate a conversation in which leaders shared their strategies for intentionally rebuilding their own tool kits and investing in their people. The dialogue was also clear evidence that this engagement and sharing of best practices is what has been missing from Zoom calls over the past two years!

Turnover is Accelerating: Three Trends Behind the Talent Shift in Financial Services

Kathy Freeman Godfrey June 24, 2021

The financial services industry is undergoing a seismic demographic shift accelerated by the pandemic. An industry filled with aging Baby Boomer leaders and financial advisors is now experiencing a wave of retirements and culture-induced departures to other firms. As noted in a recent Wall Street Journal article, there’s a national trend of workers leaving their jobs for various reasons including better opportunities and a better work-life balance.

We’ve seen three recurring trends impacting turnover in the financial services industry:

#1 The desire for a better work culture and hybrid work arrangement.

Getting executives and their teams back to the offices is essential, but there is also a desire by many to continue working remotely in some capacity. Not all companies are on board with this. For example, Morgan Stanley’s CEO, James Gorman, recently said, “If you can go to a restaurant in New York City, you can come into the office, and we want you in the office…if you want to get paid New York rates, you work in New York,” he noted. He went on to say, “None of this, ‘I’m in Colorado, and getting paid like I’m sitting in New York City.’ Sorry, that doesn’t work.”

A CEO with this attitude may soon find his colleagues heading to companies who are embracing hybrid or remote work environments. For many, working for a company whose leadership listens to their employees, especially with regard to culture and remote flexibility, has become a driver of career satisfaction. Today, in the absence of a flexible corporate policy, companies might as well open their exit doors and prepare for departures.

#2 The retirement of Boomers.

At the start of the pandemic, many Boomers put their retirement on hold. Now that the crisis is waning, people are fast-forwarding their previously planned exit strategies. A few notable retirements include Kathleen Murphy of Fidelity Investments and Barbara Novick of Blackrock, two top-level industry leaders.

The pandemic has allowed many executives to work from their second homes at the Cape, on the beach, or in the mountains. Some were reminded that life is short and expedited their retirement over health concerns. Others are prioritizing time spent with their families, hobbies, or volunteerism. The idea of going back to the full-time daily grind in the office has become unappealing for many.

Meanwhile, succession planning across the industry is in full swing. The silver lining in these retirements is that many roles are now opening up for next generation leaders. This generational shift will certainly be bringing fresh ideas and new thinking to a mature industry.

#3 The re-prioritization of staffing expenses.

Many companies are re-prioritizing their staffing expenses, which is a unique byproduct of the pandemic. Many companies have been proactively reducing headcount at senior levels to reduce payroll liability while simultaneously adding jobs at entry, junior, and mid-career levels. TIAA and Fidelity Investments are two major asset management companies that have offered early, and well-paying, retirement packages to many senior staff. Charles Schwab has also been in the headlines for reducing their headcount after acquiring TD Ameritrade yet aggressively hiring for their retail investor business.

For those who took a generous early retirement package and are looking for their next gig, there should be ample opportunities to get realigned with another company given today’s markets.

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The most noteworthy takeaway coming out of the pandemic is for companies to lead with empathy. Companies who do so will stem the tide of turnover and provide an attractive landing spot to people who are disenfranchised with their current company’s culture or work environment.

The Smart Approach to Executive Hiring in a Virtual World

Kathy Freeman Godfrey April 7, 2021

Companies across all industries have pivoted to virtual interviews since the pandemic began. Now 13 months into this grand experiment, the jury is still out regarding the effectiveness of solely relying on virtual interviews, especially at the executive level.

This new approach to hiring has also highlighted a new risk: Whether the virtual-only process works as well as the largely in-person, pre-pandemic approach. Here are three issues that are causing concern for our clients.

#1: Gauging A Candidate’s Real Interest Level

A key concern with virtual recruiting is determining how seriously a candidate is taking the interview process. Some companies that are solely hiring via virtual interviews, especially at the executive or leadership level, have been finding it challenging to assess whether a candidate’s interest is truly aligned with theirs. Some candidates are just kicking the tires from the convenience of home. It can be difficult to tell via video because visual cues and non-verbal communication, such as body language, aren’t as clear. Additionally, video interviews from home aren’t necessarily an accurate indicator of a high bar for interest. After all, another Zoom meeting is just part of the daily grind.

So, how does a hiring company know the interest is being reciprocated on the other side of the screen? How do firms protect the time of their leadership teams?

One of our clients worked around this challenge by creating to-dos for their executive-level candidates in parallel with their video conversations. After the preliminary or second round of interviews, they establish action items or tasks which require some level of preparation and commitment by the candidates. Those who weren’t that serious have bailed on the interview process. It’s better for everyone if a passive level of interest is discovered earlier in the process.

#2: Reducing the Number of Rejected Offers

An increase in rejected offers is another concern – one that is not an unexpected byproduct of virtual interviews. We suspect this is due to a lack of personal connection and difficulty building authentic rapport. In fact, some companies have been experiencing an increase in rejected offers as candidates take counter offers at their current companies. Some candidates are even leveraging offers as a negotiating tactic with other firms they are interviewing with. Now more than ever, rejected offers are highly disruptive to any hiring company’s momentum.

One response to this challenge is taking a more pointed and proactive approach with candidates. Don’t hesitate to ask if individuals are considering other opportunities and how far along they are in the process. Candidates, especially those who don’t interview often, may not realize that their transparency is valued and appreciated. If hiring companies are aware that a candidate is parallel processing other opportunities, they can be more aggressive in their pursuit of a candidate or be prepared to have backup candidates for consideration.

#3: Integrating WFH Executives Once Offices Reopen

Some clients are especially concerned about the cultural assimilation of executives who were hired virtually and have continued working from home. Many rightly wonder if and when a new hire will absorb the firm’s values and model that behavior. As a result, it’s more critical than ever that firms have a well-conceived executive onboarding plan for the post-WFH world.

Executive hires, who don’t typically need or expect nurturing, will be looking for confirmation that their new role is what they expected and that their new company is the right cultural fit. At the same time, everyone else will be checking to see if the new executive can rapidly assimilate, both culturally and influentially, in an office environment. Incorporating events that allow for team integration downstream will be equally as important.

Firms must embrace the cultural shifts that have occurred during the pandemic. The objective is to immerse new hires in the cultural values they are expected to exemplify when everyone returns to the office.

The Smart Approach aka The Hybrid Model

No one knows whether this experiment in virtual interviewing for executive-level hires will be successful in the long term. Only time will tell. In the interim, it’s prudent that companies transition to a hybrid interview model for executive roles if they haven’t already done so. As important is integrating and onboarding executives returning to the office, so they are culturally grounded and fully able to lead the growth of their companies in the months and years ahead.