Here are some insights for talent teams in UK and Australia on the extent and effect of leadership talent challenges – and what they can do about it.  (Derived from LinkedIn – Talent Solutions Report 2016)

Impact and Solutions

The success of an organisation is significantly determined by the quality of its leadership. In fact, research suggests the CEO, in particular, is responsible for up to a quarter of a company’s performance.

Finding quality leaders is critical to your organisation’s success, so it’s no real surprise that 69% of organisations find filling leadership positions is difficult and unlikely to become easier in the near future.

69% of HR decision-makers say that it’s difficult to fill leadership positions and 63% are pessimistic about the hiring outlook for leaders over the next five years.

They don’t have the skills.   The number one reason organisations find it hard to recruit leaders is the candidate’s lack of soft skills and leadership competencies. The difficulty reflects the complexity of modern leadership roles.

This is impacting the business.   A majority are seeing an impact on Employee Engagement, Innovation, and Collaboration. Of particular concern, 40% say there has been a large detrimental impact on Innovation in their organisation.

Organisations need to shift their thinking on leadership.   They need to change their mindset on how to find, develop, and inspire leaders. Whilst succession planning is the most commonly adopted and successful strategy used, other commonly used strategies are not always the most impactful.

Decision-makers selected “leadership development” as a top 3 priority for HR investment

Competition for exceptional leadership talent has intensified.   

Organisations have raised their expectations of leadership candidates, requiring exceptional soft skills as well as skills and competencies needed for today’s complex and fast changing technological environment.

A deficit of soft skills is seen as the most common quality lacking in leadership candidates and organisations are looking at their own internal future leadership candidates to build those soft skills.

What are the main reasons HR Leaders believe their organisation is having difficulty filling leadership positions?

Fierce competition.   “Organisations will need to continue to differentiate themselves in order to be front of mind for candidates…Whilst I  think our organisation is getting better at developing internal talent and attracting external talent, so are other organisations so the pace of improvement is really important.”

Increasing expectation for leadership roles.   “There is not enough talent that can come to leadership roles and manage the complexity, agility and vision needed to succeed. A lot of talent will be younger because these technologies are new – cloud, social cognitive, mobile, and analytics etc but they lack the leadership maturity, especially in growth regions/sectors.”

“Leadership skills needed for the future are more focused on emotional intelligence which is increasingly difficult to find and develop.”

Need for internal pipelining and development.   “The majority of our leadership positions are filled from our internal succession plans so it is important we continue to engage and retain our future talent with potential.” 

“Internally without an effective leadership development programme in place, there is no deep bench in the leadership pool.”

Leaders in business development and program/project management are the most difficult to hire.   

Low supply and relatively high demand is causing hiring difficulty for leaders in specific functions

The leadership talent challenge is having a business- wide impact

The impact of leadership hiring difficulties is felt in areas vital for an organisation’s future success and growth.

  1. Employee engagement/morale
  2. Innovation
  3. Collaboration
  4. Ability to meet current client’s needs, employee turnover
  5. Compensation costs
  6. Ability to attract new clients

The majority of decision-makers are experiencing difficulties filling leadership positions.

Strategies to address the leadership challenge

Organisation leaders who were optimistic about the future leadership talent landscape have strategies in place to address succession planning, talent branding and leadership development.

Succession Planning/Internal Pipeline.   “We are focusing more on talent development /succession planning. We prefer to create homegrown talents that we will promote to leadership roles when the need arises.” 

“We have an active succession plan and talent pipeline so our next in line leaders are currently being developed for more senior roles”

Employer Brand   “We are building our brand in different areas and diversifying our staff and culture which should result in better attraction of the right people in the future” 

“We have a clear employer brand, and a clear strategy for the business and what we want in leaders”

Leadership Development   “We have designed and put in place  a structured leadership program which is a combination of theory and realtime projects. This focuses on different aspects including situational leadership, risk taking, strategic thinking, etc.”

“As an organisation we are making a lot of investment in developing leadership internally. Hence we would see the impact of that investment in the next 5 years.”

What can you do to identify and build your talent pipeline?

Strategies are being put in place to reduce the challenge.  Succession planning is the most commonly adopted and most successful strategy used to address the leadership talent gap.

Organisations need to shift their mindset.   What can you do to identify and build your leadership talent pipeline?

Align your leadership talent strategy with your business strategy.   Determine which skills, behaviours and roles are needed to successfully execute your business strategy.  Your organisation’s success depends on the effectiveness of your leadership pipeline.

Embrace data to identify and broaden your leadership talent strategy.   To ensure your talent and leadership pipeline stays full, leadership development should extend to all levels of the organisation and to your most critical roles.

Build your talent brand.    Employer branding can help bridge the gap between what is being offered and what leaders want.  By knowing what’s important to leadership talent, you can craft your organisation’s talent brand to reflect your strengths and appeal to your target audience.

Provide learning and development at the moment of need.   Leaders have limited time to devote to learning. To bridge the skills gaps of your current leaders and accelerate the development of future leaders, your leadership development programme should include a blend of approaches and technologies that are available when and where needed.

Versatile Resourcing specialises in upgrading the calibre of your team and the loyalty of your best talent by developing these leadership strategies.