When organisations are cautious about hiring, why are they still investing in senior leadership?

 

By Victoria Dhillon, Co-Founder & Managing Director, The Talent Set

 

This is a question I’ve been thinking about recently.

The UK recruitment market is showing some tentative signs of improvement. The latest KPMG and REC Report on Jobs found that permanent placements increased slightly in August for the first time since late 2022, while temporary hiring continued to grow. At the same time, vacancies remain under pressure and candidate availability has increased.

So while there are some encouraging signs, this is not a market where organisations are making hiring decisions without careful consideration.

And yet, at The Talent Set we continue to see organisations making significant senior appointments.

For me, that raises an interesting point. When an organisation chooses to invest in a senior leader during a cautious period, it is often telling us something about the direction it wants to take.


Looking beyond the vacancy

A senior appointment can easily become a replacement exercise.

Someone leaves. There is a vacant role. The organisation reviews the existing job description and starts looking for someone with a similar background and experience.

But should the role still be the same?

Organisations change. Strategies change. The external environment changes. The challenges facing a leadership team today may be very different from those it faced three or five years ago.

That means I think there is value in asking a different question before beginning a senior search:

What does the organisation need its next leader to achieve?

That sounds like a simple distinction, but it can fundamentally change the conversation.

Instead of starting with the person who previously held the role, we start with the organisation's future.


What are organisations asking their senior leaders to do?

From the conversations I'm having with organisations, I see a number of different reasons for investing in senior leadership.

For some, it is about leading transformation or change.

For others, it is about stabilising the organisation during a challenging period, bringing clarity and direction at a time when there may be considerable uncertainty.

There are organisations looking for leaders who can drive growth or income generation, while others need to build stronger teams and leadership capability around them.

Sometimes the requirement is much more specific: bringing in expertise that doesn't currently exist within the organisation or helping navigate a particularly complex challenge.

And increasingly, there is a longer-term question: what leadership capability will the organisation need for its next stage?

These aren't necessarily recruitment questions. They are organisational questions that happen to result in a senior appointment.


The leadership profile is changing too

I also think we need to be careful about assuming that experience alone tells us what a successful leader will look like.

The challenges facing organisations are becoming more complex. Leaders may be expected to navigate transformation, respond to new technologies such as AI, build new capabilities, manage uncertainty and maintain momentum while priorities continue to shift.

That doesn't mean traditional leadership experience is less valuable. It means organisations need to be clearer about which experience matters for the challenge in front of them.

Someone who has successfully led an organisation through stability may have a very different skill set from someone who has led through significant transformation.

Neither is inherently better.

The important question is whether the leadership capability matches what the organisation needs next.


Do you need a permanent leader?

There is a similar question to consider when deciding between an interim and permanent appointment.

Not every leadership challenge needs an immediate permanent solution.

An experienced interim leader can provide specialist expertise quickly, bring stability during a period of change or transformation, or give an organisation time to consider its longer-term leadership requirements properly.

Equally, there will be situations where a permanent appointment is important for continuity, culture and long-term strategic delivery.

The answer depends on the problem the organisation is trying to solve.

The appointment should follow the need, rather than the other way around.


What should organisations ask before starting a senior search?

For me, this is where the real value of a senior appointment starts.

Before writing the job description, organisations could ask:

  • What has changed since the previous leader was appointed?

  • What are the biggest challenges and opportunities facing the organisation?

  • What needs to be different in three to five years?

  • What capability is currently missing from the leadership team?

  • What will the organisation need from its leadership as it evolves?

  • Are we looking for someone to maintain what we have, or help us move somewhere new?

These questions can make a significant difference to the eventual search.

They can change the brief, broaden the talent pool and, importantly, create a much clearer proposition for potential candidates.


Senior appointments are about the future

I don't think cautious hiring necessarily means organisations have stopped investing in talent.

It may mean they are becoming more deliberate about where that investment goes.

A senior appointment can be one of the most significant talent decisions an organisation makes. It can influence strategy, culture, capability and the decisions that follow.

That is why I think we should look at senior recruitment differently.

The starting point shouldn't always be the vacancy.

It should be the organisation's ambitions, its challenges and the capability it needs to navigate what comes next.

The most useful question isn't simply, "Who do we need to replace?"

It's "What does our organisation need its next leader to achieve?"

That shift moves senior recruitment from a replacement exercise to a strategic leadership decision.


Considering your next senior appointment?

We work with organisations across the charity, public and membership sectors to understand the leadership capability they need now and in the future.

Contact us to speak to a member of senior appointments team