Industry-Update-PE-VC-1700x1135-2022-FINAL-6340c173

INDUSTRY UPDATE: Private Equity & Venture Capital – October 2022


Introduction: Dry Powder and a few Questions about Private Equity and Venture Capital

The last two years have been extremely strong in terms of fundraising for PE and VC firms. One measure had them sitting on as much as $1.4 trillion in fresh capital (dry powder) as of mid-year 2022 (See source.), funds they will need to deploy in the near term, either by take-privates of public companies, or investment into existing, typically private, companies.

Given the economic headwinds in Q4 of 2022, the question is, of course, where is the growth potential and therefore where to invest?

As we have pointed out elsewhere, some companies feel so bullish about the longer term that they see this slowdown as an opportunity to invest and perhaps retool against their future strategy.  Sunita Patel of Silicon Valley Bank says, for example, “A downturn can offer opportunities to build an even stronger team, focus on market needs and potentially create whole new categories. The 2007-2009 global downturn produced Airbnb and Uber.” (See source.).

JP Morgan seems to be pursuing this logic by announcing its plans to hire 2,000 software engineers as it executes a strategic pivot toward the digitization of business processes and other strategic initiatives.  (See source.)

Other firms will doubtlessly also shift their strategy, rebalancing their investment portfolios away from inflation- or interest-rate-sensitive categories to asset classes likely to appreciate over time, e.g., real estate.

Much of the recent reporting on this sector focuses on a reduction in fundraising and on a decline in valuations.  Both of these trends are very important, of course, for the PE/VC funds and their investors, but our focus is on executive opportunities, particularly at the portfolio company level.   In this context, there is a tremendous opportunity as we highlight in our recent blog Private Money In Your Future – Who’s Who and What’s What.

Sectors that are likely to benefit from an adverse economic climate include the banking sector, certain real estate segments, environmental services, alternative energy, and electric vehicles and infrastructure to name but a few.  In that sense, the changes in the PE/VC companies we will see in this Update are informative as they reflect changes in the underlying strategy and therefore the sectors and portfolio companies these funds are investing in that will ultimately yield executive opportunity.

The data in this Update is naturally historical, so relying on it to make decisions about the future is akin to driving a car while looking in the rearview mirror.  We always encourage executives to perform appropriate due diligence during any prospective career change.  That is one reason that our clients have access to enormous data resources to make the most accurate decisions possible as they screen markets, select target companies, and then prepare for interviews.

Executive Employment In The Private Equity/Venture Capital Industry

Last year we looked at a smaller set of titles that we have now augmented to reflect the broader PE/VC executive landscape (see Editor’s Note).  This expanded set of executives, combined with the strong growth in this sector mean that the entire population has grown by about 3% p.a. to about 313,000 with approximately 16,500 having changed jobs in the last year. Regionally, the EU/UK/Middle East (ME) cohort came in at circa 92,000 industry executives, 4,779 having changed jobs.  In the US, the population grew similarly to about 221,000 with some 11,800 changing jobs in the last year.

This total population is largely male, ranging between 77% masculine (US) to 81% (EU/UK/ME) and the average tenure in these positions falls between 3.9 (EU/UK/ME) and 4.9 years (US).

Graph 1_Employing Industries

Chart 1 explores the specific industries in which executives who claim affiliation with the PE/VC fieldwork and it is no great surprise that the top five comprise about 77% of the first fifty total.  They also have some of the lower to mid-level growth rates (2%-5.1%) in the list while Non-profit Organization Management and Civic and Social Organizations both come in above 10% growth p.a.—and also sport a higher than average female executive share between 28-31%.  Separately, LinkedIn lists the following industries as all exhibiting “very high hiring demand”:

  • Information Technology
  • Computer Software
  • Non-profit Organization Management
  • Internet
  • Hospitality & Healthcare
  • Health, Wellness & Fitness
  • Biotechnology
  • Medical Device
  • Computer &  Network Security
  • Research
  • Pharmaceuticals
  • Publishing

 

Graph 2_Top 50 Employers
Chart 2 begins to explore the companies that employ these executives whereby, the top six in this case cover about 55% of the first fifty.

Of course, some of these leaders are now also leading the way in staff reductions as they shift their portfolios.

For example, Citi has decided to trim its mortgage lending team:

“The bank funded $16 billion in residential mortgages from January to June, a decrease of 5.9% compared to the same period in 2021.  Like Citi, other depositary banks are reducing their mortgage staffing levels. Wells Fargo, for example, will lay off 75 employees in its home lending division in Iowa by the end of October,  according to Worker Adjustment and Retraining Notification (WARN) notices submitted to the Iowa Workforce Development. The bank eliminated 197 mortgage jobs in Iowa across earlier layoffs. JPMorgan Chase and U.S. Bank have also shed an undisclosed number of jobs in their mortgage divisions.” (See source.)

Painful as these reductions may be for those directly affected, they underline the opportunity inherent in such changes.  As a result, Citi hired new talent to execute these changes (Liz Bryant and Darin Lugat, both formerly of Wells Fargo).

Goldman Sachs has also announced adjustments to its staff as the demand for specific segments of its business has changed, for example, IPOs and junk debt issuance. (See source.) For more perspective see The Upside of Downsizing.

On the other hand, Blackstone has ranked number one or two in the capital-raising rankings in the past year and shows accordingly high growth in its executive ranks (+18.3%), although its third quarter 2022 profits were well off, so far it seems to be avoiding staff reductions. (See source.)

To learn more about Who’s Who in the industry, see our recent article on Private Money in Your Future – Who’s Who and What’s What.

 

Graph 3_Executive Titles

Title-wise (Chart 3), the industry is not as top-heavy as some, in this case with far more Vice Presidents and Managing Directors than CEOs — a testament to the relatively concentrated state of the industry at this juncture. 

So what does a Vice President versus a Managing Director earn at, for example, BlackRock?  One source says the median value is $147,000 for a VP and $250,000 for an MD.  (See source.)

 

Graph 4_Specializations

Chart 4 explores the specializations cited by LinkedIn member executives indicating their main sphere(s) of activity.  Of course, each executive probably does have more than one string to his/her bow, so please bear that in mind when looking at the totals.

Two aspects stand out immediately in this data; the first is that Startups have plunged from number 2 in 2021 to rank 20.  Part of this is undoubtedly the enlarging of our executive pool by including more titles this year (see Editors’ Note).  However, start-ups also seem to be somewhat out of favor at the moment as being generally too risky.  One source cites a 34% drop in Q3 2022 funding for VCs due to this phenomenon  (See source). Smart money may instead be chasing established businesses that want to grow and scale.

Nevertheless, there are undoubtedly start-ups to watch in the coming months that capitalize on cost savings, consumer trends, and market opportunities. Here is Forbes’ recent list, for example: Promising start-ups in 2022.

Another key observation based on Chart 4 is the relative transferability of some of these skills versus other industry segments.  As we highlighted in our transferability analysis (Read more), generic skills such as Business Development or Sales Management are most universally transferable followed perhaps by Finance, Budgeting, Product Development, and Business Planning.  As you will see from Chart 4, some of these are present, but only Finance ranks high in the list.  In other words, there is a relatively high level of specialization in this industry vertical.

The industry is notorious for hiring in a very regiment-ed way from primarily three sources: undergrads as analysts, banking analysts from banks, and hiring of industry insiders from other PE firms. (See source.)

Let us examine one example.  We mentioned Blackstone’s relatively rapid expansion early in this Update.  Where did those associates come from?

  • Goldman Sachs (+65/-13)
  • Morgan Stanley (+47/-9)
  • PwC (+45/-3)
  • EY (+37/-2)
  • Citi (+30/-8)
  • Blackrock (+26/-10)
The list goes on to name Deloitte, J.P. Morgan, and Credit Suisse, but perhaps that suffices to make the point. Note that the moves listed above are not only at the executive level, however, our research can also identify individual job changers in case that knowledge serves our clients’ social capital strategies.

 

Graph 5_Growing Locations

Most of the top 50 locations for PE/VC executives (Chart 5) seem to have grown faster than the industry average.  This suggests that some locations must also be shrinking or at least growing much more slowly (Chart 6).

 

Graph 6_Locations with Lowest Growth

Among the top three locations, Citi, JP Morgan, Goldman Sachs, and Morgan Stanley dominate the employed executives list as the largest employers.  As of San Francisco, BlackRock and Charles Schwab join the top ranks.  Northern Trust shows up in Chicago, and State Street, Fidelity, and BNY Mellon come in as of Boston.  LinkedIn states that the hiring demand is ‘very high’ in these top locations, except for Los Angeles which ranks as ‘moderate’.

Outside the US and the UK, top employers include Credit Agricole, Societe Generale, and Rothschild & Co. in Paris, Citi, Standard Chartered Bank, and Credit Suisse in the UAE, and in Ireland (profiled due to its high growth rate), Citi, State Street, and Citco Group. Naturally many other locations deserve further mention but we have limited space in this Update.

Our clients have access to our complete research capabilities that typically evolve in an initial screening stage, then a deeper dive into a smaller list of targeted companies, followed by in-depth profiling of specific companies and even hiring executives ahead of critical interviews.

Peter Irish, CEO, The Barrett Group

Click here for a printable version of Industry Update – Private Equity & Venture Capital 2022

Editor’s Note:

In this particular Update “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has approximately 850 million users (See source). It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year-over-year change (YOY Change) as the change in the number of professionals divided by the count as of last year. “Attrition” is defined as the departures in the last 12 months divided by the average headcount over the last year.

Research to the Rescue Blog

Research to the Rescue

Many executives come to us with wide-eyed looks. They mix trepidation with astonishment because they realize they have absolutely no idea how to find a suitable position in today’s market.

Often it has been years, possibly decades, since they looked for a job.

Sometimes they desperately want to change industries, roles, and locations. And, again, have no idea where to start.

Occasionally they are suddenly unemployed and looking for a leg up.

In all of these cases and many more, we calmly start by helping them slow down… to speed up.

The Clarity Program© helps clients deeply reflect on where they are. Clients learn where they really want to go. Here is how one client reflected on his Clarity Program© experience:

“Towards the end, [David, his Clarity Coach] asked me to write about my dream job. I typed out where I wanted to live, what my office was like, and how my family fit into the picture. I’ve been through coaching and personality assessments before, but not like this. David’s insights and the simple tasks he assigned me gave me a clearer vision of myself and my goals. I felt so hopeful!” [Joel Engle, Read more]

Next comes the packaging and personal branding stage. Here, we convert their history and accomplishments into a set of structured arguments. These naturally lead from where they have been professionally, to where they wish to go.

There are innumerable ways to demonstrate the transferability of experience and thereby justify a change of direction mid-career—if you know how.

Fortunately, we do.

Then comes the complex business of winnowing down the market approach to a manageable strategy. Our clients are supported by a team of six professionals. One member of their team is a research specialist. The Barrett Group has one of the most extensive database architectures in the business—one of the reasons Forbes cites us in the top 0.5% of the industry. We cover more than 800 million businesses and executives via this infrastructure. If a client defines their data requests too broadly, they are often shocked at the amount of work they need to personally do in order to contact all of the executives that our research provides.

We have been supporting clients now for more than three decades. We actively help clients to avoid this situation by guiding them toward a data funneling process. In other words, with the output of the Clarity Program© in hand, we ask clients to screen their objectives at a high level, be they geographic, industry-vertical, or role-related—or all three. This produces a broad brush understanding of the potential targets. From there we guide clients to consider an intermediate culling of that large list to a more detailed specific list of target employers. Lastly, as interviews loom, clients approach us for specific data on the hiring manager and company profile to make sure they are ideally prepared for their critical first and/or follow-up interviews.

Dan Resendes, our Chief Consulting Officer Emeritus, narrates one specific example. This is an overview of a research team success story. It resulted in three interviews at the client’s targeted type of organization. 

1) The client had originally requested that our research team provide him with the names, email addresses and telephone numbers of hiring executives working at LGBTQ+ organizations across 18 different industries. (This type of research would have taken weeks and is akin to running around the block 15 times to walk in the front door.) 

2) Additionally, If we conducted the research using the methodology he requested he would have had to make hundreds of cold calls, to sell his “elevator speech” to total strangers in an attempt to secure an interview. 

3) When the research team received his request, they provided him with a) much more precise information b) and a different methodology c) where he could target the exact type of executive he requested d) who would then recruit him, e) without having to use an elevator speech or make a single cold call. 

4) The end result was that he followed the research team’s instructions and just by clicking on a few research lists provided and speaking to people already in his social capital he easily secured 3 interviews within 2 weeks at the organizations of his choice. 

It does not get any better than that.

B. Randall Willis, a recent client, narrates his Barrett Group [TBG] research experience like this:

…Randall employed a strategy that he had used during a previous career change: Identify marketing companies that were potentially good fits and reach out to them directly. The TBG research team helped by producing a list of 650 agencies for Randall to explore.

“I gave TBG certain criteria, such as agencies only in the Northeast and 200 people or fewer. I researched every company on the list and whittled the number to around 30. Then I reached out to them. [TBG] helped me draft the language. About half responded, and I engaged in conversations with about two or three.”

One company turned out to be an ideal fit – a small, internet marketing firm at which the CEO plans to retire and is seeking a successor. Randall was offered the role of head of client success, with the potential to become a managing director within months and, ultimately, CEO and owner. This opportunity is the sweet spot for Randall between the corporate and entrepreneurial worlds.

“It’s better than I ever could have expected. It’s not too corporate-y. The team has some growing and areas for improvement that I can help with, but I am starting with a good team,” said Randall.

Randall is thrilled with how his career change journey ends. [B. Randall Willis, Read more.]

The executive employment market is daunting, but you don’t have to feel alone. All you need is a little support. The research team at The Barrett Group can come to your rescue! Give us a call.

Peter Irish, CEO
The Barrett Group

Financial Services

INDUSTRY UPDATE: Financial Services – October 2022


Financial Services Market Outlook

As we define it, the Financial Services Market comprises banking, investment advice and management, investment banking, insurance, accounting, and associated financial services. One source says this about the industry’s prospects:

“The global financial services market is expected to grow from $23,319.52 billion in 2021 to $25,839.35 billion in 2022 at a compound annual growth rate (CAGR) of 10.8%. The market is expected to grow to $37,343.95 billion in 2026 at a compound annual growth rate (CAGR) of 9.6%.” [See source] 

The same source explains that Western Europe is the largest single market and is followed by North America. This source highlights some of the key trends facing this industry:

  • Digitization of commercial lending,
  • Continuing expansion of electronic payments, and
  • Utilization of big data analytics
Of course, the abrupt changes in interest rates implemented by the US Federal Reserve and other central banks to curb rising inflation will certainly also impact the industry’s outlook:

“Generally, high interest rates are good news for the future of the banking industry and financial services companies as they improve investment yields. In the longer term, digitization and a DIY approach to financial activity will have a transformative impact on businesses in the financial sector. This banking industry trend will improve financial inclusion and the availability of financial products and allow for cost-cutting. On the whole, this is excellent news for the industry, but slow-to-act and high-cost providers will suffer.” [See source]

On the other hand, stock markets have contracted sharply in recent weeks. There have been short-term impacts, particularly on investment advice, investment management, and investment banking. This will likely affect staffing as evidenced by this recent announcement:

Goldman Sachs to kick off Wall Street layoff season with hundreds of job cuts this month.” 

It is understandable that when deal-making drops off, a company like Goldman Sachs does not need so many deal-makers or support people. Well-run companies are constantly reviewing their human capital. They evaluate this against the expected demand, shuffling specific specializations as they do to make sure that the demand and capacity remain relatively balanced over time. In fact, even during a restructuring, new positions may be created that require particular skills and experience.

For example, another stalwart in the industry, Ernst & Young, is potentially planning to split to take better advantage of market conditions:

“Ahead of a plan to split its auditing and management-consulting businesses, Ernst & Young revealed that revenues grew by 16.4% in the year to June 30th, the best growth rate in 20 years. Sales from its consulting services grew at a faster pace than those from accounting, although accounting still brought it more money. [E&Y] thinks a break-up will allow the consultancy side to thrive, freeing it from conflict-of-interest rules that stop it working with firms that [E&Y] also audits. Its 13,000 partners will start voting on the spin-off in November.” [The Economist, weekly September 24, 2022]

One of the enduring changes we can expect in the future is more attention to the composition of companies’ boards, especially in Europe.

Here is how one source rates the overall board situation in Europe:

  • “European financial services firms meet shareholder expectations in traditional areas of boardroom experience, including politics, accountancy, legal and compliance.
  • But directors with sustainability, FinTech and cybersecurity experience are underrepresented in the boardroom, according to investors.
  • However, board appointments in sustainability and technology are accelerating, with almost half (45% and 46% respectively) of directors with experience in these areas recruited in the last three years.
  • And, while gender diversity remains below investor expectations, the data shows more female than male board appointees have been made over the last three years.” [See source]

Outside the boardroom, other pockets of opportunity in this industry revolve around the reimagination of the energy business. This is due to both a new emphasis on environmental sustainability and trailing impacts from Russia’s invasion of Ukraine. These investments will buoy the Middle East as Europe pivots away from Russia. It will stimulate electric vehicle manufacturing and the charging infrastructure, gas terminals, and transportation. It will also create demand for executive talent not only in engineering but in financial service disciplines as well. [Read New Energy for Your Life, Your Career, and the World for more information.]

Another major segment, the insurance sector, has showed incredible agility in managing the recent string of crises. One source forecasts this segment’s immediate future as follows:

“The road ahead is dotted with multiple hurdles—rising inflation, interest rates, and loss costs; the looming threats of recession, climate change, and geopolitical upheaval; and competition from InsurTechs and even noninsurance entities such as e-tailers and manufacturers, to name a few. This is no time for carriers to be satisfied with the adaptations they’ve had to make.”

“Instead, they should be building upon the momentum they’ve achieved to maintain an ongoing culture of innovation while making customer-centricity the focal point of the industry’s standard operating model.” [See source]

The same source goes on to highlight the relative risks and opportunities in multiple subsegments of the insurance market. Illustrating as it does so the overall theme for the financial services industry: expect significant changes and, while staying put becomes ever riskier, keep your eyes open and take educated risks going forward that can potentially pay big dividends.

Executive Employment

[See the Editor’s Note for more details and definitions.]

Some 900,000 executives work in the financial industry. It grew by about 1% in the last year and shows a persistently low female executive share of just 25%. Industry players in the EU, UK, and Middle East employ some 256,000 execs. This group expanded by 2% in the past year but is even less gender-balanced at just 18% female. The US cohort comprises some 648,000. Having grown by 1%, it boasts a higher though modest female executive share of 27%. Median tenure runs 3.8 years in the EU, UK and Middle East. The median tenure is 4.7 years in the US.

Not surprisingly, this source identified the most executives in four major sectors (See Chart 1). These sectors include banking, insurance, investment management, and accounting. Collectively these employ approximately 660,000 execs—73% of the total industry’s executive population.

These largest segments are not the fastest growing, though. That accolade goes to VC & PE (+7.3%), Non-profit Organization Management (+6.7%), Biotechnology (+6.2%) and Research (+6.1%). Other sectors have in fact contracted over the last year, including Oil & Energy, Medical Practice, Transportation, and Restaurants.

In keeping with the size of the segments noted above, Chart 2 lists mainly banks as the largest employers of executives. However, there are two notable exceptions: Goldman Sachs and Marsh, a diversified financial services firm and an insurance specialist. Overall, it seems that the fastest growing subsegment in the past year has been consulting specialists. Companies such as EY (+15.8%), KPMG (+14.6%), PwC (+12.2%), but Goldman Sachs (+12%) and Blackstone (+18.2%) also grew strongly.

In keeping with the size of the segments noted above, Chart 2 lists mainly banks as the largest employers of executives, with two notable exceptions: Goldman Sachs and Marsh, a diversified financial services firm and an insurance specialist. Overall, it seems that the fastest growing subsegment in the past year has been consulting specialists such as EY (+15.8%), KPMG (+14.6%), PwC (+12.2%), but Goldman Sachs (+12%) and Blackstone (+18.2%) also grew strongly.

As mentioned in the introduction, Goldman Sachs may be reversing some of that growth later this year.

Bear in mind that this company has about 8,300 vice presidents and almost 190 C-level officers collectively having an average tenure of 7.3 years if LinkedIn’s data is correct, and that this group has actually grown over the past year by a net 115 positions. Most of the talent flow has been an exchange with Morgan Stanley (-26 departures /+28 hires), JP Morgan Chase & Co. (-14/+26), Next Capital (+36), Citi (-10/+17), and Wells Fargo (-12/+11). (Note: Barrett Group clients have access to incredibly detailed data on millions of companies via our research arm.)

Interestingly, Blackstone added a net 1,279 employees (not just execs) and has hired significantly from Goldman Sachs over the past year (-16/+72), Morgan Stanley (-13/+47), PwC (-4/+46), EY (-2/+40) not to mention a long list of additional donor companies. Peak hiring occurred in June 2022 so far.

Chart 3_Executive Titles

In relatively unconcentrated industries we often see more CEOs than Vice Presidents because every small company must have a head honcho, however, this industry is obviously much more concentrated based on the title demography (Chart 3) that shows relatively more Vice Presidents. The preponderance of Presidents is an interesting point—quite different from most industries possibly because of the strong banking component. Female executive shares peak in the Chief Operating Officer (32%), Vice President role (36%) and Chief Marketing Officer (40%) and achieve their nadir in the Chief Information Officer and Managing Partner positions (each at 15% female).

Chart 4_Specializations
As usual, we are interested to know a little more about what these executives actually do.

Chart 4 sheds some light on this point by enumerating the specializations that executives have cited in their LinkedIn profiles. Normally Sales and /or Business Development top these charts but not in this industry. Here the specific skills of Finance, Financial Analysis, Risk Management, Banking, Insurance, and Investments come out on top ahead of more generic skills. If readers are considering transferring into or out of this industry, the relative frequency of the more generic and transferable skills can be seen in this report: Do You Have Tremendous Transferability?  A number of the financial service’s most common skills appear to be highly transferable from industry to industry including Finance, Budgeting, Business Planning, Mergers & Acquisitions (M&A), Financial Analysis, and Risk Management.

Chart 5_Executive Locations
As far as location is concerned, Chart 5 provides an overview of where the biggest populations of industry executives work.

New York stands head and shoulders above the others in the ranking but also boasts a higher than average +2% growth rate, which nonetheless pales compared to the heady +3% or more visible in the UAE, Frankfurt, Ireland, and Saudi Arabia. Nevertheless, numerous cities in the US and Europe also exceed the industry’s overall growth rate, including London (+2.6%), Paris (2.1+), Columbus/OH (+2.1%), Munich (+2.3%), Raleigh/NC (+2.0%), and Milan (+2.4%).

There is an interesting variation in the executive gender mix based on location that is probably also related to the industry mix there, too, with the high end in Seattle and Portland (30% female), followed by San Francisco, Washington, DC, Charlotte, and Atlanta (29%), Houston and Detroit (28%), and Boston (27%).

LinkedIn also offers an assessment of the relative hiring demand in each location whereby the following markets are all cited as having a “very high” hiring demand: New York, London, Chicago, Boston, San Francisco, Dallas-Fort Worth, Paris, Charlotte, Austin, Nashville, Raleigh-Durham.

Peter Irish, CEO
The Barrett Group

Click here to download a printable version of this Industry Update – Financial Services, October 2022

Editor’s Note:

In this particular Update “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has approximately 850 million users (See source). It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year-over-year change (YOY Change) as the change in the number of professionals divided by the count as of last year and “attrition” as the departures in the last 12 months divided by the average headcount over the last year.

New Energy for Your Life, Your Career, and the World

New Energy for Your Life, Your Career, and the World

Have you noticed the volume of news about energy and the climate lately? Clearly, we are at a watershed moment in history.

The constrained gas supply for Europe provides one explanation as is the crescendo of floods, drought, wildfires, and dramatic weather events—mounting evidence that the environment is changing rapidly. Ice is melting on glaciers and both poles and sea levels are rising. Average peak temperatures are predicted to climb significantly. We call this anthropogenic change—effects caused by humans.

Can humanity mitigate the damage we’ve done?

Well, we are trying! Here are just a few of the recent headlines:

However you personally feel about climate change, one undeniable effect is the enormous number of executive roles this wave of investment will deliver.

Even before these headlines, growth in executive positions related to energy and the environment was a robust 3% p.a., generating approximately 2,000 new executive positions or job changes in the last year*. About 850 of these were in the US (+2% YOY) and the balance, 1,150 or so, were in the UK, EU, and Middle East (+4%).

We are not only talking about engineering roles, either. There are educational, communication, marketing, financial, project management, and many other non-technical executive roles now in this sector—clearly slated to boom over the coming years. Within the area of energy and environment-related positions, LinkedIn lists these as the most important subjects:

  • Environmental Awareness
  • Sustainability
  • Environmental Compliance
  • Environmental Policy
  • Environmental Consulting
  • Environmental Science
  • Environmental Management Systems

Finance (+15%), recruiting (+13%), analytical skills (+8%), and process improvement (+8%) come out on top in terms of the generic skills most in demand within the burgeoning growth of environment-related executive positions.

Geographically, it is rare to see New York in second place, but these cities constitute the top hiring locations for energy and environment-related executives:

TBG- New Energy for your life and career

Who’s hiring?

Well, this list will change significantly given the investment surge cited above, but even so, looking at the companies with the highest hiring action in the past 12 months shows how widespread the demand is:

  • Arcadis (Amsterdam, Netherlands)
  • Department for Environment, Food, Rural Affairs (London, England)
  • Wood (Aberdeen, Scotland)
  • ICF (Fairfax, Virginia)
  • Brown & Caldwell (Walnut Creek, California)
  • CDM Smith (Boston, Massachusetts)

Is investment in the environment likely to be just a fad, something that will subside quickly and fade? In other words, is transitioning into this industry a good, long-term career strategy?

In our opinion, the scope of the issues at hand far exceeds humanity’s response so far. The Economist (August 30, 2022) reports that the G20 countries’ environmental ministers met at the end of August to review progress toward their emission reduction goals ahead of the November COP27, and have already acknowledged in their last meeting that we collectively are not doing nearly enough to meet the goal of keeping global temperatures well below 2º C above pre-industrial levels.

What more can we do?

Well, frankly, yes. There is more we collectively can do, including geo-engineering. So you can expect these subjects to gain currency in the near future—among many others:

Each of these subjects and many others will attract enormous amounts of investment as the world leans in to mitigate impending disaster.

Perhaps it is time you considered riding this wave and changing industries to gain new energy for your life and career.

The Barrett Group can help with your career transition as we have been helping executives reroute and manage their careers now for more than 30 years. Give us a call.

Peter Irish, CEO
The Barrett Group

*Editor’s Note:

In this particular article, “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Chairman’s Blog will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research. “YOY” refers to growth in the number of executives over the last 12 months.

Industry Update: The Market for Executives 2027

INDUSTRY UPDATE: The Market for Executives in 2027 – August 2022

The Executive Market In 2027

According to LinkedIn, the executive market today comprises approximately 8.4 million professionals in the US, UK, EU, and Middle East. This market has grown by about 0.9% in the past year.  Meanwhile circa 316,000 executives have also changed jobs. In total, there were about 390,000 executive opportunities in the past year available to career changers.

This executive market is approximately 25% female—well behind the general population from a gender point of view—and regionally quite diverse. For example, in the US this segment numbers about 4.8 million. US numbers grew more slowly at 0.7% in the past year. They showed a modest 3.3% rate of job change and was slightly better in terms of gender balance at 27% female. In the EU and UK, the segment includes 3.6 million executives. These European numbers grew by 1%, sported a brisk 4.3% rate of job change, and weighs in at just 22% female. The Middle East, also grew by 1% to 432,000. 5.1% of which changed assignments during the year, and, predictably, demonstrates the lowest share of female executives at just 17%.

Graph 1a_Projected Executive Employment by Industry 2022 vs. 2027
Chart 1 explores the industry implications of how the executive market is likely to evolve.

Granted, many macroeconomic and political factors may deflect the current trajectory. If current trends hold true over the next five years, it is likely that this market will swell by almost 400,000 in total. Some 60,000 of those positions will be in the Financial Services industry which in this case excludes banking (+1,500) and insurance (+6,455). Computer software will also grow significantly, adding another circa 29,000 opportunities. Management consulting will also grow (+26,582). On the current trajectory, the restaurant industry, telecommunications, and medical practice will all lose ground while a broad range of industries will add 9,000 or more positions during this time frame.

Some of these faster-growing segments include high female executive shares. These are, for example, non-profit organization management (45% female), hospitals and health care (39%), and professional training and coaching (38%). However, on balance the continued growth of this total industrial portfolio alone is unlikely to significantly change executive gender shares. Changes in the attitudes and practices of industry leaders will more likely impact this balance going forward. [See our special Industry Update on Female Executives for more information.]

Graph 2a_Projected Executive Employment by Location

What will executives actually do in the future?

Most executives cite specializations as a way of describing their major areas of focus. Chart 2 illustrates how employment is likely to change within each of these specializations, again, if current trends continue.

As usual, generating new business and the related area of sales management come out on top in this overview. These add 38,000 and 34,000 positions respectively. But budgeting and business planning also seem set to grow significantly, adding another 55,000 executive roles between them. Meanwhile entrepreneurship, product development, and operations management also project the addition of 20,000 or more roles each.

Graph 3a_Projected Executive Employment by Specialization 2022 vs. 2027
Assuming current trends hold true, New York is unlikely to lose its preeminent position as the top location for the executive market bar none (Chart Three). Because of its size, even a stately growth rate of just 1.1% per annum means it will add more than 32,000 executive positions in the next five years.
Overall, the US executive market population is growing more slowly now so major locations such as Los Angeles, Washington DC, Miami, and Chicago all show increases of 4,000 to 11,000 executives in this time frame. Meanwhile, London (+23,636), Paris (+12,965), and the UAE (+11,311) are all projected to continue to grow at a faster pace.

Now please bear in mind that being employed by a company based in New York does not necessarily mean that you will work in New York. This is especially given the fact that working remotely appears to be here to stay.

How Executives Will Work

Remote Work Is Here To Stay.

As have many other sources, the Economist makes the case that working remotely is here to stay. (See source.)

Here are a few points summarized from their article:

  • A monthly survey since May 2020 suggests that 20% of full-time hours in the US are now worked remotely. This total is expected to rise to about 28%—up from just 5% before the pandemic.
  • This is partly because the remote experience has been relatively good both in terms of improved work-life balance and the technological developments allowing smooth communication and integration between remote associates.
  • The ability to live where you want is also an important factor that seems to be increasingly important in hiring decisions to attract younger employees. This allows employees to live in less expensive areas as well.
  • Whether remote working leads to higher productivity, in the long run, is still open. Though, certainly, not having to commute is a boon to both quality of life and productivity.

The Gig Economy Will Move Into The Executive Market Suite.

Although over $600 billion in venture capital funds were invested in 2021—ten times the amount a decade ago—the industry has taken a hit in 2022 (See source.). The “war in Ukraine, China’s purging of its tech industry,” and the rise in interest rates have all cramped VC’s style. Nevertheless, The Economist predicts that VC’s role in powering portfolio companies will continue to accelerate.

The Barrett Group reviewed the subject of VC’s portfolio company executive employment recently and reports:

“In the United States, EU, UK, and Middle East, approximately 24,600 executives as we define them are employed in this sector, a cohort that grew by 8% in the past year, and has seen 1,370 job changes in the same period. They are overwhelmingly male (82%) and LinkedIn cites the hiring demand in general as “very high.” ”

“Please remember that this is just the tip of the iceberg. Every one of these firms has a portfolio of companies in which they are invested and every one of those companies employs further executives. For example and chosen purely at random, Battery Ventures, a US-based, mid-level company in terms of the number of executives directly employed, lists 590 companies in which they are invested. If the same relation were to hold true for all VC and PE companies (which we cannot verify), then just the companies we cite later in this update would cover more than 60,000 portfolio companies.” (See source.)

Imagine that each of these estimated 60,000 portfolio companies has 3 to 4 executives. You will quickly see the potential impact this trend has on executive employment. Gigs at VC companies can be highly lucrative. However, they are typically relatively short, averaging 2-4 years depending on the specialization.

Beyond the VC sphere, the gig executive option is becoming increasingly attractive. This is in times of uncertainty as a company may need a growth specialist at one point or an efficiency maven at another. Hiring gig executives allows flexibility. It avoids commitments to large blocks of fixed cost, a practice gaining currency as “fractional leadership.” (See source.)

Adaptive Compensation Will Increase Complexity And Opportunity In The Executive Market

There was a time when compensation was simple. Large companies had a scale such as Hay points that defined the relative value of a role. These would then correlate to a level of base pay. Some variable elements would then be added on top and perhaps a few specific benefits such as vacation and sick days. Well, life in HR has become increasingly complicated as the search for more efficient and effective compensation has progressed.

At a high level, Equity Methods summarizes four key trends in executive compensation (See source.)

  1. Growing adoption of relative performance awards.
  2. Increasing reliance on sector-based comparison groups when issuing relative awards.
  3. A surge in the issuance of executive mega grants.
  4. The onset of ESG metrics in annual and long-term incentive plans.

Intense competition for talent and demographics also play a role. We read every day how millennials and still younger generations may value social or cultural aspects of work more than monetary rewards. Deloitte effectively debunks some of this belief (See source.). They reach the conclusion that what motivates employees to join a company may differ considerably from what encourages retention. In any case, according to Deloitte, dissatisfaction with compensation appears to affect millennials, too. Nevertheless, millennials have undoubtedly forced companies to broaden the portfolio of perks and benefits available.

At a micro-level, this complexity breeds opportunity for executives to influence their compensation packages far more broadly than ever before.

ESG Is Likely To Gain Momentum

A recent Economist article reminds us of the importance of these three letters:

“…environment, social and governance (ESG) investing […] has ballooned in recent years; the titans of investment management claim that more than a third of their assets, or $35 trn in total, are monitored through one ESG lens or another.” [EconomistJuly 23rd, 2022].

Whether through sincere altruism, a desire to protect future generations, self-interest, or due to the threat of expected government regulation, there seems to be definite momentum behind industry efforts to clean up their acts environmentally.

In our Industry Update on Female Executives, we highlighted the social front. The growing consensus is that diversity is important in its own right and not only because of government regulation.

Many corporations are actively adopting guidelines and practices to promote diversity.

For example:

…JPMorgan Chase has eliminated gender-specific language from its bylaws, including replacing “chairman” with “chair” and removing gendered pronouns like “his” and “her.” This announcement is consistent with the bank’s commitment to diversity and inclusion, which includes a $30 billion commitment to advance racial equity and a commitment to expanding a diverse workforce.” (See source.

Other companies have adopted targets aimed at increasing gender equality in the executive suite. Wells Fargo, for example, has recently stated that “…diversity, equity, and inclusion metrics are integrated into monthly business review meetings.” [See source.]

The impact of ESG is gradual. But it means that executives will require new skills and perspectives to steer through the increasing complexity of cultural measures being created to address these challenges.

Who Will Own The Companies At Which Executives Work?

Private And Public Companies In The US

In the US, there are approximately 27 million business enterprises. Approximately 4,000 of these are publicly traded and another 8,000 are powered by private equity. So the vast majority of US enterprise is privately owned, and relatively small. In fact, small to medium enterprises (SME’s) make up 86.4% of employment at firms with 500 employees or more. You might be surprised at the list of privately held companies compiled by Forbes. These include giants such as Cargill, Koch, Publix, Mars, and HEB as the top five. (See source 1. See source 2).

Private equity is a very active player in this large pool. It is likely to take a larger share of private companies over time. For example, PitchBook has this to say about PE fundraising in 2022:

“Private equity firms are currently in what PitchBook analysts call “perhaps the most crowded fundraising market in history,” according to our latest US PE Breakdown. Firms raised $176 billion across 191 funds in the first six months of 2022, setting a pace that, if sustained, could surpass last year’s total fund value of nearly $340 billion across 577 funds.” (See source.)

According to McKinsey, the number of public companies dropped from about 5,000 to the current number primarily in 2010 and as a result of acquisition essentially in the banking, manufacturing, and technology sectors. Since then, counting IPOs and continuing acquisitions and mergers, the total number of publicly traded companies in the US has remained relatively stable. (See source.) Overall they comprise about one-third of non-farm employment.

Interestingly, the top ten employers of executives by our definition (see Editor’s Note) are all banks or financial services companies including the following:

Graph 4_Average Executive Compensation
It seems safe to summarize that, in the US, the balance between publicly traded and privately owned companies will remain relatively stable over the forecast period. However, private companies will increasingly, if very gradually, be acquired by private equity.

Verizon opines that private companies respond more quickly to challenges and opportunities. And also that private companies are more likely to invest in growth than public companies (See source.). So if that is the culture you are seeking, then being a big fish in a small pond may well be for you. If you go the private equity route, it will be more like a gig—a job defined by a project or achieving specific milestones—versus a more traditional, long-term relationship.

On the other hand, larger companies simply have more executive positions to offer. There is considerable churn in their ranks (attrition ranged between 3% and 6% for the top five companies listed above). So the smaller fish in the bigger pond approach has its benefits, too.

Private And Public Companies In Europe

Europe lists approximately 22.5 million enterprises (excluding financial services) and this number also seems to be relatively stable (See source.). Publicly listed companies in 2020 totaled about 5,688 (See source.) based on listing at the national level with the highest number in Spain (2,711) and the overall average equaling 316 per country. Here again, we see that public companies represent a very small share of total enterprises. In Europe, SMEs (in this case up to 249 employees) cover approximately 64.5% of employment. (See source.).

Although the data is a little out of date, the European Savings Institute offers an interesting illustration of how total share ownership has changed in Europe over recent decades. Households have dropped from 38% to about 15% of equity. Government and insurance funds have also shrunk while investment funds and above all foreign capital have blossomed—more than doubling their share of total European equity during the period. (See source.)

Europe is also seeing record deal-making in the private equity space as reported by PitchBook:

“European PE deal value well surpassed 2021’s H1 figure, with an estimated €463.5 billion transacted across 4,053 deals, representing year-over-year increases of 35% and 16%, respectively. Transactions continue to grow in size, particularly at the top of the range, pushing total deal value upward.”

“The business products and services sector received the largest share of European PE capital in the first half of the year, with €124.2 billion invested—its highest ever H1 figure. Companies in the sector are likely [to] maintain or even grow their revenues as the market becomes more distressed, while its consumer counterpart is expected to continue to struggle.”

Because public stock markets are underperforming at the moment there is a tendency toward “take-privates” rather than IPO-style exits, however, this is probably cyclical and not systemic. (See source.)

As in the US, LinkedIn’s overview of the companies employing the largest number of executives as we define them (see Editor’s Note) includes a large number of financial services companies:
Graph 5_Companies Employing The Largest Number of Executives
Therefore, in summary, we do expect these trends to continue during the forecast periods with public companies remaining relatively stable in terms of their total share of employment, while private companies constitute the majority of the value creation in the region, increasingly funded by private equity.

Executives in Europe have a clear choice between being smaller fishes in larger pools at the publicly traded companies (see the list of largest employers above) with relatively high attrition rates between (4%-7% for the list above), or joining the large and vibrant ranks of smaller, private companies that drive GDP growth and employment in the region. The latter offer relative stability if not glamour, although, increasing private equity ownership probably means the gig economy will also probably intrude in the executive suite as individuals are hired to execute a specific strategy or achieve a specific set of milestones.

Peter Irish, CEO, The Barrett Group

Click here to download a printable version: Industry Update – The Market for Executives

Editor’s Note:

In this particular monograph, “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has approximately 830 million users. (See source.) It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year-over-year change (YOY Change) as the change in the number of professionals divided by the count as of last year. “Attrition” is defined as the departures in the last 12 months divided by the average headcount over the last year.

The September Surge is Starting

The September Surge is Starting

It is illogical to expect, but happens nonetheless. Every September for decades, companies increase their executive hiring activity. And this creates what we call a “September Surge.” Why?

  • While the unpublished market continues to seethe throughout the summer, undoubtedly some hiring managers come back from vacation and suddenly roll up their sleeves.
  • Recruiters who have live search contracts are looking at the calendar and abruptly realize they have limited time to complete their assignments.
  • Budgets for hiring will expire in the next several months until the new year, so it’s now or never.
  • People in the northern hemisphere are also affected by a certain irrational enthusiasm in September when the weather is generally still good and it is still summer (at least until the third week).

Just At The Moment, And Particularly In The US, There Is Also Some Good News To Celebrate:

  • The most recent strong jobs report indicates the underlying strength of the economy.
  • Inflation steadied in the latest month and the Federal Reserve may be tempering its plans for rapid rate increases.
  • Stock markets have generally rebounded from their summer lows.
  • Consumer confidence has ticked up.
  • Gas prices have fallen.
  • Retail sales as a short-term indicator of consumer sentiment have risen.
  • And the US has passed its largest ever investment in mitigating climate change,  not to mention moderating drug prices, and reducing the fiscal deficit.

So You Are Allowed To Feel Good About Your Prospects, Especially After A Long, Hard First Half Of The Year.

CB134_Client Interviews and Landings 2022

Our clients are also benefitting as interviews rose to an unprecedented level ahead of the September Surge in hiring. As you can see from the chart, typically an uptick in interviews eventually leads to an increase in hirings, and that suggests September is going to be a strong month for our clients landing executive assignments. By the way, you can read all about our clients’ successes on our Frontline Report

This year more than 200 of our clients have landed executive jobs already. So we are confident that our tried and true five-step career change process will continue to deliver its superlative results for those willing to put in the work. But you need not take our word for it. Forbes has again cited the Barrett Group as one of the best in the business of helping executives find their next career step.

If you are not feeling the September Surge approaching or are still sitting on the sidelines and biting your nails, perhaps it is time you take steps to progress your career. After all, staying put is not necessarily a strategy for success. Give us a call.

Peter Irish, CEO
The Barrett Group

sun

Here Comes the Sun

Where is the sun? It has surely been a long, cold, lonely year for many of us as first Covid, then the war in Ukraine, gas shortages and rising prices, and now inflation all seemed like a perfect storm threatening to derail the world economy and scare us all into hiding under the bed.

However, Barrett Group clients have enjoyed better than average weather as more than 200 have landed executive positions so far this year due to our tried and true five-step process. (Read more.) 

Nevertheless, it still feels like these have been difficult times for far too many people.

So it is heartening to feel that, perhaps, some of the clouds are lifting.

First, there is the stronger than expected jobs report in the US—528,000 new jobs in July—twice what the Wall Street Journal projected! Unemployment in the US is now at a near historic low of 3.5%. Yes, that may prompt further inflation, but the Federal Reserve is already busily turning the interest rate screw to tamp down inflation, and at least gas prices have begun to fall at the pump. Mainly the strong jobs report signals the strength of the economy.

Then comes the real breakthrough…

Provided the US Congress does finally pass and the President does sign the Inflation Reduction Act in the next week or two, we can expect truly unprecedented industrial shifts. Bloomberg News (see source) suggests some of the real industrial winners from this legislation include: 

  • Private equity (avoided tax increases)
  • Electric car makers (vehicle subsidies in the form of tax credits)
  • Renewable energy (also in the form of tax credits)
  • Oil companies (new oil and gas lease sales and tax credits for carbon capture)

PitchBook goes on to highlight some of the funds that are pouring into renewable energy as a result under the heading “Christmas for climate tech”:

“Climate tech investors and advocates were shocked by the agreement […] that, if passed, would be the largest investment in decarbonization the US has ever made.”

“[…] the package will supercharge an already strong environment for climate tech investment. US VC funding for climate tech has been on a tear in recent years, topping $16 billion in 2021, more than double the prior year, according to PitchBook data.”

“[…] Investors say the bill will reduce the green premium on pricey technologies, speed up the network effect of electric vehicles and renewable electricity, and provide capital that goes where VCs won’t. In short, it’s Christmas for climate tech.” (See source.)

We have already seen 2.4% annual growth in executive positions in the renewables sector which at last review was running among the hottest industries, meaning the industry is likely to add another 9,000 executives in the next few years—even before the Inflation Reduction Act.

So you might seriously want to consider whether your skills and background make you a candidate for one of these industries destined for an extra growth spurt.

The Barrett Group has been helping executives transition from one industry, role, and/or location to another for more than 30 years. We are the experts in career transition. (Read more.) 

And, as you may have already recognized, staying put is not necessarily a winning strategy, if you feel that you are not recognized for your contributions, or earning what you deserve. We help clients on both these fronts using our unique targeting step to really assess the individual client’s needs and aspirations before co-formulating and implementing their career change strategies.

So, this could be your moment. Why not earn more while transitioning to a growth industry and improving your quality of life?

Impossible, you say?

That’s not how our clients see it:

“I used to think I could do anything on my own – that I didn’t need help to successfully advance my career, but I had a rude awakening. Through The Barrett Group’s process, I learned a different approach – something I should have been doing all along.” [Sven Leverson, Read more.]

“I had been a chief information officer. The operations officer role was something I had never really been in before. It was new and exciting, and I looked forward to it.” “I probably would not have negotiated the salary and everything else I ended up with, you know, the perks that came with it, the terms of the contract and all those other things. I can’t thank The Barrett Group enough.” [Diane, VP Operations, Read more.

“What I was considering was a massive career change. I felt like I was leaving my tribe. It was a moment of existential crisis for me, and I had to get my bearings straight…” “Looking back, I can say without question that The Barrett Group program was worth the investment […] I can’t recommend the program enough.” [Joel Engle, Chief Growth Officer, Read more.

So shake off those shadows and come out in the sun. The Barrett Group can help you earn more and have more professional satisfaction, or even transition to new, exciting industries that will clearly benefit from new investment and tax policies. Take the first step: give us a call.

Peter Irish, CEO
The Barrett Group

How satisfied are you with your title?

How Satisfied Are You with Your Title?

Where are you in your executive journey? Are you satisfied?

Have You Ever Paused To Give This Serious Thought?

If you are just starting out, are you ambitious and driven? Or perhaps you are frustrated by a glass ceiling and eager to move up?

Are you mid-career, more interested in security, and improving your retirement assets? [See Are Your Career Assets Frozen? for more information on this subject.] 

Are you nearing the end of your career? Perhaps you are seeking that opportunity to perhaps give back. Are you ready to help others with what you’ve learned, and still earn a reasonable income?

Or has your career journey been unexpectedly interrupted by redundancy, illness, or other life events? Maybe you are ready to get back into the game?

Where You Are In Your Career Trajectory Matters, Of Course. It Also Matters Where You Want To Be. This And More Need To Be Considered To Ensure You Are Satisfied.

That is why our career change program begins with our Clarity Program. Through an assessment of each client’s particular journey, we examine where they are so far. We examine the current state of their career while we consider their aspirations for the future. We do all this because one size does not fit all. Each Barrett Group client receives support from a six-member team of career specialists. Our team helps our clients to lay out the plan. And then we help execute it. The end goal, of course, is to achieve the client’s particular career aspirations.

And Achieve Them We Do!

During the first two weeks of July 2022 for example—in the middle of the summer—SIXTEEN clients landed their next roles. [See our Frontline Reports for details.]

What Kinds Of Roles Do Our Clients Desire?

Here is an overview of the titles achieved by our clients in the first half of 2022.

We are pleased with the heavy senior executive tilt you see in the graphic above. It accurately reflects the kind of clients we have supported for more than three decades. It is also true that positions with the same title may be incomparable because the content may vary considerably. If you are interested in a better understanding of what executive titles actually denote, then the US Chamber of Commerce offers a useful overview (with somewhat of a US-bias). [See Source.]

And executive titles are in transition as well, of course, as new roles evolve and become more popular. Perhaps you have seen “Chief People Officer” supplanting “Chief Human Resources Officer,” for example. There may well be sound reasons for some of this evolution. Forbes investigated this trend some years ago in an interesting review called “Those goofy new executive titles…” (2019) [See Source.] Our clients benefit from our 31 years of experience, not only achieving the title they desire but the job content and compensation as well.

Are You Satisfied In Your Role?

On the subject of content, imagine if you will, that you can define your own role. Consider if you could add the duties you enjoy and subtract those you feel less enthusiastic about. This is a benefit available to our clients because fully 75% of the executive roles we help clients land come through the unpublished market. This is often where fixed job descriptions and compensation guidelines do not exist. This allows the candidate to have a significant influence on all of these parameters. Why? Because he or she is being hired to address an issue or opportunity, not to fill a specific, pre-defined role. [See Why Are You Peering Through a Keyhole at the Market for Executives? for more information on the unpublished market.] 

How Is Your Compensation?

The same is largely true for compensation, too. Indeed is an on-line job board and example of the published market. It is interesting to note that the average executive income noted by Indeed are considerably lower than what our clients typically achieve. [See Source]. This makes sense to us because a job board publishes pre-defined jobs with pre-defined compensation packages. This is in comparison to the unpublished market, where the focus is on solving an issue or addressing an opportunity. Compensation in the unpublished market is generally not pre-defined. [See Payback Time for more information on what our clients earn.] 

Besides, our clients again benefit from our negotiation support and can virtually always add tens of thousands of dollars (or euros) to any initial offer.

We encourage you to give your career the serious thought it deserves—after all, it is usually your largest pre-retirement asset by a long shot.

If you are finding it difficult to achieve your professional aspirations, give us a call. We believe our clients are entitled to be satisfied with their titles, job content, compensation and with their work/life balance… and we know how to make those dreams come true.

Peter Irish, CEO
The Barrett Group

Payback time!

Payback Time

It’s payback time. One extremely important reason to consider changing roles as an executive is that typically you can earn more money when you do—as long as you do not “job hop.”   This is doubly true if you have someone as experienced as the Barrett Group to help you tactically as you negotiate your new package.

How much do our clients typically earn? What’s their payback?

Here’s a little data from the first half of 2022 focused only on salary and bonus income (excluding equity and other perks).

CB_131_Payback Time_Compensation (excluding shares and perks)

As the chart explains, at the top end, we have seen a number of clients land earning $500,000 or more, and indeed, the average of the top quartile is about $300,000. The overall average of all clients landing so far in 2022, at least those on whom we have specific income data, is $200,000, and even the bottom quartile averages $140,000.

Let’s explore what payback means in terms of increases for our clients.

  • Client A landed a position as COO at a software development company and sweetened the original offer with the help of his Barrett Group team from $300k base with a $70k sign-on bonus, and 110,000 company shares—the highest compensation package ever awarded any employee at that company excepting only the current CEO.
  • Client B agreed to come on board as General Manager for a significant airline fleet, enriching his initial offer of $250k plus $125k bonus potential by adding another $50k sign-on bonus.
  • Client C was initially offered a President role in an IT services business at $200k salary, $500k bonus potential, a possible promotion in six months, and ESOP shares. Through the application of some of our tried and true negotiating techniques, the client ended up with a $250k base, $500k defined bonus, a specific commitment to promotion and raise in six months, and $4 million in ESOP shares vesting over 4 years.
  • Client D received an initial offer as a VP in the Retail and Consumer Durables industry at $200k, 30% bonus potential, and a $5k relocation package. Again, we utilized our experience to help the client add $10k base salary, a fully paid relocation package, $5k sign-on bonus, and a long-term incentive plan worth another 75% of base salary.
  • Client E initially fielded an offer as Vice President in the Financial Services industry including $140k base and bonus potential of $15k. The client worked closely with his Barrett Group consulting team and managed to increase the base to $180k before accepting the position.

We could go on.

The Barrett Group has been handling compensation package negotiations for more than 30 years. We simply know a lot more about what is possible than does the average candidate, so our clients benefit from this experience, the application of situation-appropriate tactics, and a long list of potential compensation elements from which to draw during the negotiation.

In fact, the Barrett Group can virtually always add $10,000, $20,000, $30,000 or more to the first offer in cash, equity, benefits, or other perks, thereby handily paying back our clients’ investment in our services.

Here’s how one satisfied executive client put it in her Success Story:

“I probably would not have negotiated the salary and everything else I ended up with, you know, the perks that came with it, the terms of the contract and all those other things. I can’t thank The Barrett Group enough.” [Diane, EVP, Read More]

Undoubtedly, you deserve to earn what you are worth. So when it is your payback time, consider how an investment in professional career management services by the Barrett Group pays back time and time again. Don’t leave any money on the table. Give us a call.

Peter Irish
CEO
The Barrett Group

keyhole

Why are you peering through a keyhole at the market for executives?

Have you ever actually tried to look through a keyhole? If so, you know that your field of view is extremely limited. You can really only see a small swath of the room on the other side. Inevitably, you miss anything too far to the right, left, top, or bottom. Yet that is exactly how most professionals look at the executive job market.

Most executives only know about executive recruiters and on-line job postings. In effect, these professionals are peering through a keyhole at the market for executives—when at least 75% of the market is hidden from view. That’s why we call it the unpublished market. (See So How Does the Unpublished Market Actually Work? for more details.)

In Fact, The Market For Executives Is Huge—And Growing.

In the US, for example, this market* now comprises approximately 4.7 million individuals. With market growth of 0.7% and another 138,000 changing jobs, all told, the executive opportunities in the US numbered about 170,000 jobs in the last year.

But let’s add in Europe, the UK, and the Middle East. Now the market expands by another 3.2 million. It has grown by 1% in the past year and has also seen another 128,000 change jobs. The subtotal of executive positions changing jobs in this region is about 160,000 executives in the past 12 months.

All told, this means the executive market reached 7.9 million executives. It grew by 0.9% offering about 330,000 opportunities to change jobs in the past year.

Perhaps You Understand What We Mean About Looking Through A Keyhole Now?

The executive job market is a huge and dynamic market. Do you know how to look at it?

Construction currently ranks at the top of the list of industries employing executives. It has more than 500,000 but with only a 0.07% growth rate. Financial Services comes in second. It has about 459,000 execs but a robust 2.2% growth rate. The Top 25 Industries chart provides more information on circa 87% of the executive roles under discussion.

What Activities Are All These Executives Involved In? The Top 25 Specializations Chart Explains.

As usual, New Business Development and Sales Management lead the way. These industries are comprised of more than 800,000 and 700,000 executives respectively. They are followed by Finance, Budgeting, and Business Planning. Remember, this is a list of specializations as cited by executives on LinkedIn. It is probable that each executive will cite more than one specialization and thus be counted in several categories. Still, this chart provides an understanding of the relative frequency of specializations. Some of the specializations also serve as ideal conduits for executives wishing to transfer to another role, industry, or geography. (See Do You Have Tremendous Transferability?) Note that displaying the transferability of our client’s skills is a specialty of ours.

You Might Reasonably Also Ask, Where Are All Of These Roles Geographically?

CB130_Top 25 Locations_Number of Executives

Historically, location data typically trend that New York has the largest population of executives but not necessarily the highest growth rate. The highest growth rates recently have indeed been outside of the US. And this is true in this case, too. The UAE, London, Paris, and Munich are all growing faster than any Top-25 location in the US.

Of course, each Barrett Group client has access to a great deal more data. They have a career change team that provides specific information about opportunities and the decision-makers who can offer them. Our data services comprise literally millions of executives on multiple continents.

Consider this:

  • Only about 33,000 of these exec roles were filled through recruiters.
  • Only circa 50,000 of these positions were filled through posted advertising.
  • Fully 247,000 of these opportunities are occupied by candidates who came through the unpublished market.

Why are you still peering through the keyhole and missing most executive opportunities?

Perhaps you need someone who can open the door for you. It would help if you had someone with 31 years of experience helping executives clarify their objectives, discover appropriate opportunities, present themselves effectively, negotiate an exceptional compensation package, and on-board successfully.

Perhaps you need the Barrett Group. Let’s talk and find out!

Peter Irish, CEO
The Barrett Group

*Editor’s Note:

In this particular Chairman’s Blog, “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn. It represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has approximately 830 million users. (See Source.) It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year-over-year change (YOY Change) as the change in the number of professionals divided by the count as of last year.

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