Coming into 2022, the U.S. economy was in the midst of a tightrope act that seemed eminently precarious yet, astonishingly, manageable. Despite inflationary pressure from unraveling supply chains, wages were trending upward. Production was also growing steadily, and the labor market appeared to be starting to stabilize. It seemed safe to assume that equilibrium was just a few well-balanced steps ahead.
Then global conflict shook the wire—hard.
Resulting headwinds from the war in Ukraine triggered new economic issues while exacerbating those we thought were nearly behind us. Inflation hit a 40-year high, and though the Labor Department’s report that 362,000 jobs were added in June seems reassuring, it’s an alarm bell for the Fed.
While companies look to capitalize on remaining growth opportunities, they are also cognizant of risk on the horizon and are seeking ways to minimize its impact on their businesses. All this, while simultaneously facing the manifold challenges of an ever-tightening job market. It’s a tough situation, to be sure; but for companies with forward-thinking talent strategies, it’s also a chance to move past mere survival and into an era of greater resilience and growth.
The rise and fall — and rise again — of business growth initiatives
Economic downturns and global events have historically spurred extraordinary bursts of innovation, and the COVID pandemic has been no exception. Perhaps uniquely, though, subsequent supply chain turmoil both disrupted and further extended this period of innovation. What started as a scramble for workarounds evolved into a fervent investment in digital capability upgrades as companies sought improved demand planning and real-time visibility.
Innovation drives growth, so it’s not surprising that its fits-and-starts would mirror business growth prioritization. Growth strategy is frequently ranked among the most in-demand skill sets in BTG's annual Skills Index, but in looking at the data on a half-year basis, it’s clear that companies have changed their priorities over the past few years:
- 2019: Pre-pandemic
Growth strategy was a middle-of-the-road priority in 2019, falling from the fifth most in-demand skill sought in the first half of the year to #8 in the second. It was still on the C-suite’s mind, but not its primary focus.
- 1H 2020: Beginning of the pandemic
Growth fell completely off the list in the first half of 2020 as companies rapidly pivoted their strategies toward right-sized staffing, process optimization, and general triage. Survival surpassed growth as a top concern.
- 2H 2020/1H 2021: Vaccines roll out
Optimism followed on the heels of vaccine roll-outs, and unprecedented business opportunities stoked a renewed interest in potential growth, putting it back on the in-demand skills list at #4.
- 2H 2021: The Great Resignation
Growth took a backseat to labor concerns in the latter half of 2021, falling to #9. Between competing for talent and automating processes to maintain (or increase) productivity, companies couldn’t spare much strategy for business growth.
- 1H 2022: Living with the pandemic
Entering the current year, growth strategy found its way back to the middle of the pack, with companies still looking to capture available opportunities yet turning ample attention toward buttoning up their organizations, process, and finances. For the time being, the latter activities are keeping growth ambitions in check.
Currently, talent management and digital transformation are emerging as centerpieces of corporate growth strategies. PwC reports that 77% of executives say hiring and retaining talent will be a top growth driver in 2022, and 60% say the same for digital transformation.
The thing is, these anticipated drivers threaten to become their own speed bumps. A recent report from McKinsey found the ongoing talent shortage to be a curtailing factor in digital acceleration efforts: “In our 2020 survey, only 10% of companies said they had sufficient in-house digital talent. And by this year, that figure had dropped dramatically, to only 1%.” Ringing the same alarm bell, almost half of the respondents to the PwC survey cited the talent shortage as the “biggest risk to their business achieving its growth targets.”
Weathering the forthcoming freeze
The risk is real, as broader labor market trends such as the Great Resignation, Boss Loss, and hybrid work vs. mandatory return-to-office moves further complicate the challenges of completing critical work. While unemployment is nearly back at pre-pandemic levels, the number of available jobs far outstrips the number of available workers at a rate of 2:1.
In order to close skills gaps without increasing headcount, companies are either reskilling and redeploying existing staff or turning toward the enormous pool of highly skilled independent talent—adopting a “liquid workforce” approach. The latter is often more efficient and effective, as there’s no time lost to training, and additional experts can be added as projects evolve and new skills gaps emerge.
A rise in the demand for risk management expertise
Additional risks lurk on the horizon, from cybersecurity threats and sustainability concerns to financial market turbulence and changing regulations. BTG has seen a 200% YOY increase in requests that are explicitly for risk management experts, making it one of the fastest growing skills for 2022.
Sustainability risk management, in particular, has become a top priority. Yet the “green skills gap” persists, making it even tougher to find talent in an already slim market. Across industries, BTG reports that more and more companies are seeking independent experts who can help them prepare for the impacts of climate change by assessing the environmental impacts and risk factors of their facilities and manufacturing sites. These experts possess deep experience in sustainability analysis and project management, allowing them to jump right in and accelerate foundational initiatives.
The demand for financial risk management experts is even higher. As organizations seek to get ahead of broader financial market risks, comply with increased regulations, and assess risk in consumer finance and credit, targeted expertise has become critical. Along with risk management requests, BTG has seen heightened demand for related skills in two additional financial expertise buckets: financial controls, accounting and audit; and financial planning, analysis, and modeling. Both are among the top five most in-demand skills sought from independent talent this year, largely due to a parallel demand for interim finance talent—including CFOs.
The increased risk exposure is perhaps most acutely felt by the life sciences industry. The risks involved in drug development have proliferated as quickly as perspectives on the development process have shifted. Here, independent experts are helping to develop frameworks for managing this risk as companies develop and roll out new therapies. They’re also able to help assess clinical trial data and determine the risks and likelihood of success for subsequent development phases.
Balancing Risk and Reward Without Adding Headcount
Though seeking the rewards of growth and innovation, companies remain vigilant of risk on the horizon. As such, they’re strategizing ways to remain resilient should a recession occur (which 75% of CEOs globally say is already underway or expected to happen before the end of 2023).
A big part of that strategy involves filling critical skills gaps by supplementing their core workforce with independent talent. A survey from Harvard Business School and the BCG Henderson Institute found that “90% of business leaders reported that on-demand talent would be somewhat or very important to their organizations’ future competitive advantage.”
Requests for talent skilled in cost reduction are up 400% as companies seek to right-size spending and maintain margins amid economic headwinds. Requests for AI and machine learning expertise are up 500%—at the top of the exec wish list—to help companies make more informed decisions about strategic growth areas and automate processes to reduce costs.
A liquid workforce approach has also become an effective interim solution for organizations experiencing—or anticipating— “Boss Loss.” Burnt out from years of unmanageable workloads compounded with the pandemic’s extraordinary pressures, many executives are leaving their jobs to improve their work-life balance. One recent survey found that 72% of executives expect to resign within the next two years.
BTG’s talent network includes seasoned C-suite executives as well as classically trained consultants, subject matter experts, and execution-oriented project managers. Their expertise covers a broad range of specialized skills, operational knowledge, and strategic capabilities, allowing them to provide relief for business leaders who are stretched thin.
In this type of support role, independent talent can help business leaders complete critical work and continue driving growth initiatives—all without increasing headcount. There’s no need to go through an extensive hiring and onboarding process, either. All BTG experts are carefully curated and vetted, and their extensive experience enables them to quickly and seamlessly support existing teams or work independently as needed.
On-demand talent can also be effective as a counter-cyclical measure, filling skill and capacity gaps and serving as a smaller gauge solution when consulting budgets get cut. A fluid talent strategy allows companies to test and experiment with new organizational capabilities and the type of talent they would like to hire for full-time roles before committing to a permanent headcount.
Ultimately, to find the balance that’s so critical for long-term growth, it’s important for business leaders to prioritize near-term measures while keeping an eye to the future. A quick and decisive shift in hiring strategy now can become a foundation for future resilience, allowing organizations to weather whatever comes next.
About the AuthorMore Content by Emily Slayton