This is the first in a three-part series focusing on corporate leadership that will discuss the talent scarcity currently facing companies across the globe. Well-known management consulting company DDI, along with Deloitte, Korn Ferry, ManPower Group, and Chief Executive all conducted separate surveys and studies regarding the future of corporate leadership—particularly “bench strength,” or the capability of an organization’s existing staff members to move into positions of greater responsibility—and the results universally indicated that we are experiencing a growing shortage of executive leadership, both nationally and internationally.
According to DDI, the percentage of HR managers who are currently confident about their organization’s bench strength has reached a ten-year low of just 11%. Another telling statistic is that current leaders are only able to fill about 47% of their critical roles (ddiworld.com).
Where Is Everyone?
In the blockbuster movie series The Avengers, evil warlord Thanos has one desire: to snap his fingers and eradicate half of life in the Universe. Right now, as companies everywhere struggle to fill key positions at every level, CEOs may find themselves wondering if Thanos wasn’t real after all … and successful. Where is everyone?
Multiple factors are at play. According to Arizona State University’s School of Global Management, the nearly-empty leadership talent pipeline has four primary causes (asu.edu):
- Baby Boomers are Leaving the Workforce – Currently, Baby Boomers make up about one-third of the workforce, and most of them have been there long enough to have assumed top-tier roles. However, millions of them have also retired or are planning to retire shortly. The COVID pandemic exacerbated this situation, as Baby Boomers are a more vulnerable age group, creating numerous vacancies in C-suites worldwide.
- Younger Generations are Underprepared – The Boomers’ mass exodus leaves the younger generations—specifically Millennials, who make up the largest segment of the population—to fill in the gaps, and according to McKinsey & Co. , they aren’t ready. While they have skills that older generations don’t always have, they lack the life and work experience that would suit them for top-level leadership roles.
- Needs are Changing – Technology is advancing almost faster than humankind can keep up with it. Nowadays, leaders need more than leadership skills; they also need highly-specialized technical expertise that’s hard to come by. Organizations are struggling to find the whole package—candidates with the experience, maturity, leadership AND the technological know-how to fit the bill.
- Expectations are Changing – Worker expectations are changing. Workers today are looking for higher paychecks, more flexible hours, improved work-life balance, and remote-work opportunities. Companies that aren’t able to meet these expectations will have a harder time finding suitable talent.
So Now What?
The best way companies can shore up their leadership pipeline is to reskill and upskill their existing employees. A company culture that prioritizes growth and learning will shape their own future leaders. You can foster this growth by pinpointing and teaching the relevant skills for your business model, incorporating robust training programs, and establishing peer mentoring systems (asu.edu).
Don’t miss the next article in this series, focusing on how COVID is impacting corporate leadership in the United States.