EXECUTIVE LEASING : At the Leasing Edge – Demand is as sharp as ever

New Zealand’s labour market may be softening little but, contrary to predictions, that’s apparently had no impact on the increasing popularity of leased executive talent.
“We were expecting the market to become softer this year, but we haven’t seen any downturn,” says Carmen Bailey, director of recruitment company Emergent. “We’ve just had phenomenal month.”
Peter Harbidge, executive GM of Hudson, goes even further. “If anything, demand has become stronger. We think it’s driven by caution on the part of employers, who opt for shorter term commitments.”
Where companies once brought in the hired help only when needs were desperate – to fill maternity gaps or cope with added workloads, there are now signs they’re hooked on the flexibility of the leasing option.
Tracey Sharpe, manager technical and operations at OCG, says companies are now using contractors more strategically than before. “Corporates budget for specialist skills to offset headcount limitations.”
For many it’s matter of getting the right skill mix by whatever means are available.
Kevin Chappell of Executive Taskforce sees more open outlook from employers. “Companies are saying let’s look at the skills we need. How we bring it on board is secondary.”
Low unemployment and an ageing population are also major factors in the tight market, but there’s also social factor, with many people choosing to avoid permanent roles.
“People are looking for work-life balance,” says Bede Ashby, managing director of Wellington-based Momentum. Executive leasing has doubled for his firm in the past two years and they’ve just had their best June quarter ever.
“The flexibility and variety of contracting appeals to people. For them, it is not what you earn that gives you power, it is your power to earn.”
The upcoming Generation Y is also affecting the market. For them, loyalty is not major factor – they’re driven more by what suits their individual needs.
“They hop between jobs,” says Ashby. “They’ve seen their parents made redundant by companies that were considered safe. At the same time, they have not lived through an economic downturn themselves, so they don’t understand what it means to hang onto something.”

A variable demand
Despite generally tight market, the need varies across different specialist areas, with accounting and IT people always being in high demand and others less so.
At the moment, there are specific niches in very high demand – such as finance jobs driven by regulatory compliance with standards such as Sarbanes Oxley, Basle 2 and IFRS (International Financial Reporting Standards).
Accounting & Finance represents significant part – perhaps as high as third of the executive leasing market. Demand is very strong, with number of recruitment companies pointing out that it is currently very difficult to fill mid-range roles ($60-$90K). Management accounting has been identified as an area of particular shortage.
General Management is at the other end of the demand scale. Here there is surplus of candidates available. Most roles are filled internally by secondment or shared among team. There also seems to be quite bit of informal recruiting by word of mouth, rather than positions being advertised. Candidates often end up with number of part-time roles, consulting, mentoring, advising or negotiating.
Human Resources has become an area of expertise in huge demand. That’s not only because of the increased focus on talent attraction and retention. Many companies are going through restructuring that increases the HR workload and smaller companies use contractors to fill gaps. This is seen by most recruitment agencies as cyclical market, subject to ups and downs.
Information Technology has become specialist recruitment area where demand continues to outstrip supply. “We are finding particular demand for business and tests analysts and VoIP specialists, people in the .Net space with good communication skills and top-level Cisco engineers,” says Clare Fletcher, general manager of IT specialists Candle. “On positive note, we are receiving high-level interest from people overseas wanting to immigrate.”
Operations & Logistics is small and certainly not hotly contested part of the market. Some recruitment companies claim growing activity with more project work and broadening talent pool. Others consider it stagnant market with supply and demand dwindling. “Supply chain specialists are an area where there’s potential growth,” says Sharpe. “It’s being underutilised at the moment.”
Sales & Marketing is mixed bag. Because the sales area is based on relationships, it’s not natural territory for the interim executive which means roles come up only rarely. However, things seem to be changing at the mid-to-senior level, according to Sharpe. “It is an increasing percentage of our business, especially at key account and channel review level.” Marketing is much stronger. There are many project roles and number of people who like the variety of moving between industries, learning and transferring methodology they pick up.

Focus on the future
The skill shortage in New Zealand is not just matter of demographics or of people going overseas, believes Chappell.
“There’s lack of strategic planning in relation to input and output, lack of coordination between academia and commerce. Young people choose careers without evaluation of what the market wants or is likely to want down the line.
“So you get situation where, for instance, we get marketers when we need accountants or structural engineers when we need roading engineers. The recognition of where future skills are needed is ad hoc at best.”
A phenomenon seen across the executive leasing market is the inverse proportion between supply and demand at different levels of seniority. At the lower end, there are few people competing for many jobs. At the top, many people are jostling for very few jobs.
The team at Madison has come to the realisation that the tight skilled labour market is not part of an economic cycle, but has become structural reality in New Zealand, says Bernadette Ryan, Business unit manager of Madison Executive.
The search for top-quality part-time players is not just happening in the corporate league. Amongst the small and medium-sized enterprises that dominate New Zealand’s market, executive leasing has also come to the fore.
David Swaffield, managing director of Management4Hire, says many businesses cannot justify full-time person at executive level, but do require executive input. His company provides companies such as this with executives in all disciplines often just for few hours or days week.
The current buoyancy in the market despite gloomy expectations shows just how unreliable predictions can be. Consultants are understandably reticent about making bold forecasts for the coming year.
“We’ve just done our six-monthly report,” says Harbidge. “Of the 1700 employers surveyed, one third is still looking to augment staff in next six months. This is down on previous years, but still pretty positive.”
Sharpe expects growth towards the end of the year in line with economic trends as exporters begin to feel the effect of the lower Kiwi dollar. “Next year it could be more dynamic.”
The one safe prediction is that executive leasing will increase rather than decrease in importance over the coming years.

Getting the recipe right
Recruitment companies across the board agree that the most important factor for companies looking to employ an executive contractor is to know exactly what they want to achieve.
“The best way to order contractor is know what your deliverables and expectations are,” says Emergent’s Carmen Bailey. “If you don’t have goalposts in the ground or they change, it is very difficult. You need the right framework to get the right person.”
Kevin Chappell of Executive Taskforce agrees. “The key is the brief in relation to what you need to do. Look at outcomes and outputs, not primarily ski

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