Richard Crux, Managing Partner, Düsseldorf, Germany
Paula Elmore, Managing Partner, San Francisco, USA
Lee Brantingham, Managing Partner, Hong Kong, China
What Impact has COVID had on HR Practices…and What Can We Learn From It?
We surveyed a global group of senior HR and talent acquisition professionals on the impact that the health crisis has had on a range of executive search and human capital management practices. Remote working is seen by most as a positive development, but there is a greater need to assess the capability of leaders within a digitized workforce, whilst at the same time executive search budgets have shrunk.
Conducted in April and May, just over a year after the WHO declared the COVID outbreak a pandemic, the survey aimed to take a long-term pulse of how the key HR functions of organizations have been impacted.
The vast majority of HR executives have embraced and are supportive of a largely remote workforce. Two in every three respondents said that the working from home model is either positive or very positive for their organization.
Reasons cited for this include the improvement in efficiencies associated with digitized workforces, with less commuting and co-worker distraction. Perhaps more importantly from an HR perspective, the work/life balance is also better, which leads to higher rates of employee retention. There has also been a mindset shift from company leaders about how efficient a remote workforce can be. Additionally, some mentioned that this way of working has the flexibility and dynamism that younger generations have been looking for.
Interestingly, the majority of respondents (62%) felt that COVID has brought about an increased need to assess the capabilities of their executives, mainly because leading a virtual/remote workforce requires a different skillset and leadership style. The degree to which leaders supported the mental health of employees was of huge importance when societal lockdowns commenced, and this is just as important as the outbreak drags on.
Half of the respondents said that COVID has negatively impacted executive search budgets, and 35% said that COVID has negatively impacted the number of searches they were undertaking.
“The early days of the pandemic had a significant impact on executive search activity as client organizations grappled with the crisis’s near-term impact on their respective businesses and employees, as well as the immediate forced shift to a remote work model,” explained Paula Elmore, Managing Partner at NGS Global’s San Francisco office. “By the middle of 2020, a growing number of companies seemed to be adapting to a new working model and finding a path forward in terms of their executive recruiting requirements.”
The confidential global survey was completed by CHROs, VPs of HR, and Talent Acquisition executives across all inhabited continents and represent the vast majority of the largest industrial nations of the world, including the USA, China, Germany, India, the UK, France, Brazil and Spain. Companies from a wide variety of sectors participated, including finance, health, telecommunications, food and beverages, and cosmetics.
Along with so many aspects of an organization, the search for executive talent has been adversely affected by COVID:
• 85% said that the search process has changed, with 33% saying that it has changed a lot or a great deal, and 33% saying that it has changed for the worse
• 83% said that the speed of a search has changed as a result of COVID, with 33% saying that it has changed a lot or a great deal, and 35% saying that it has changed for the worse.
Yet the survey clearly indicates that the picture is not homogenously negative. Three in every four respondents said that various aspects of the candidate interview process have improved or at least not gotten any worse as a result of COVID.
Interview scheduling is much more efficient because candidates are more readily available in the digital world. The hiring process is no longer constrained by the logistics associated with in-person meetings. This enables firms to at least initially pitch a job opportunity to a more geographically diverse candidate pool. Some respondents, however, pointed out that whilst online meetings and interviews have advantages, they need to conduct a higher number of those online meetings to properly assess a candidate and develop a strong bond.
“At the very senior executive level, my clients were initially very reluctant to move to an offer without being able to physically meet in person with candidates or have candidates visit global headquarters,” explained Lee Brantingham, Managing Partner for NGS Global in Hong Kong.
“As the length and depth of the travel restrictions became clear, many of these clients were able to adapt not only through video interviewing but also found in-country peers who could be brought into the process. Often, they would physically meet and assess senior candidates on behalf of the hiring managers. HR teams also used in-depth candidate assessment tools they had not used before. Deep referencing also became even more important. These strategies helped offset the initial reluctance of making critical hiring decisions.”
Other key anecdotal takeaways from the survey included:
• key leadership skills that are seen as most valuable throughout the pandemic include the ability to inspire others, resilience, adaptability, and competencies around integration and communication
• there is a greater organizational emphasis on local empowerment and accountability, without having the support of regional resources who are unable to physically join or visit local teams
• even though working from home was seen as mostly positive, several drawbacks were mentioned. Some respondents perceived a reduction in collaboration, innovation and productivity at their firms, and felt that their organizational culture was weaker as a result
• working from home has also impacted the onboarding process for new hires. Candidates have even rejected offers after consideration on this point and not being able to meet with the new teams face-to-face. Yet many new hires are asking for a work from home component to be built into their contracts
• finally, executive-level candidates might be exercising caution when considering a career move in today’s climate, which compounds recruiting challenges.
Delving further into COVID’s impact, NGS Global conducted their own internal survey exploring what the company’s own partner group felt about the impact that COVID has had on executive search.
Nine out of every ten partners felt that COVID has changed their search processes and approach at least moderately, if not significantly.
The elements that have changed most dramatically are business development (more than half (54%) of NGS Global’s partners felt that this has changed significantly or extremely) and the interview process (93% of partners felt that this aspect has changed at least moderately, if not significantly or extremely).
The interviews are in general shorter when conducted on video, but some partners have found that to be more efficient. Interestingly, some have also suggested that online interviews deliver better outcomes than before: they have allowed for the introduction of traditional competency-based/objective interviewing instead of drawing judgments based on a candidate's executive presence/personality that used to color judgments when meeting in-person.
The elements that have changed the least include client expectation (with 4 in every 5 partners claiming that this has not been a significant change) and qualifying candidates (with 3 in every 4 partners stating the same).
Richard Crux is the Managing Partner of NGS Global’s German operations in Düsseldorf, and the research project lead.
“COVID forced the hand of every organization to become deeply self-reflective. Initially driven by the need to keep their workforce safe from the virus, HR executives are now grappling with longer term fundamental issues and policies around how they should best manage and support employees, how best to collaborate, with what technologies, and what fundamental ways of working are best suited to both productivity and staff wellbeing.
"Hiring teams should be aware that candidate expectations have also shifted a year into the pandemic. Flexible, tech-centric, collaborative workplace cultures that have concrete diversity plans and evidence of progress are winning the war for talent.”
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Also from Paula: Challenges of Gathering Compensation Data on Candidates
Also from Richard: A Profile of Düsseldorf, Germany and NGS Global's Practice There