07/01/2024 – 7:00
Consultancies specializing in recruiting executives and advisors have seen a tendency to intensify the search for professionals with knowledge that will begin to be more in demand, especially in 2023. Among them, specialists in generative artificial intelligence, ESG (an acronym in English for best environmental, social and governance) and financial/tax that specialize in the changes brought about by the reform. In the financial market, the upward trend is in the search for professionals who are dedicated to investor relations to try to bring back the assets under management lost throughout 2023.
The movement comes after stabilization in the second half of the year, in a year in which several changes made the scenario more challenging for executives and advisors. Among them, global monetary tightening, which took away investments from promising technology companies, intensification of geopolitical conflicts, extreme weather events and a billion-dollar accounting scandal in the country, which resulted in a credit crisis that was especially harsh for retail.
Even so, 63% of around 80% of the projects carried out by the executive hiring consultancy May in 2023 came from companies' growth theses. Only 17% went to companies seeking some restructuring. The remaining 20% went to corporations that sought to continue their plans associated with improving performance. The projects were all about hiring CEOs, directors and advisors.
“In the second half of the year, we noticed an increase in the search for CEOs with greater orientation towards new business and growth strategies”, says Marcelo de Lucca, founding partner of Maio. “There was also a greater search for commercial and business unit directors, which shows a greater appetite for future growth.”
The Korn Ferry consultancy found, in research on board governance and remuneration, the growing trend in the search for independent members, with greater gender equality and more varied payment models. When comparing just the 84 companies that responded to both the 2021 and 2022 surveys, they all increased their advisors' fixed fees. The biggest increase was due to independents. In the total remuneration package, however, the independent board chairman had a slight reduction in earnings, of 1%.
“An invisible revolution has been taking place in relation to the hiring of advisors”, says de Lucca, from Maio. “In addition to just over 400 companies listed on the Brazilian stock exchange, which are required to maintain their boards of directors due to regulatory aspects, many private and non-public companies have seen their constitution as a way to facilitate access to new sources of financing, whether in the search for partners or via financial instruments in the capital market.”
As a result, he states that there has been a significant increase in the formation of boards (consultative or management) and the search for professionals with the capacity to incorporate new knowledge, mainly in corporate governance, finance, new businesses, technology and people.
Efficiency
When searching for executives who take care of the operational part, the most searched word last year, according to Maio, was “efficiency”, with 66% of the projects they led being the result of some structural redesign. Only 28% of hires were made through performance-based replacements.
“When we talk about the functional role, we had close to 40% of the projects looking for CFOs and COOs (financial and operational directors), which highlights the priority in the search for efficiency”, says de Lucca. “The biggest demands from CFOs were connected to improving controls and cost management, in addition to reviewing the capital structure and debt renegotiation.”
The COOs had the challenge of seeking operational efficiency throughout the supply and logistics chain. “In addition to executives to lead finance and operations, we had 20% of our projects dedicated to hiring CEOs,” he says. For him, the topic of efficiency will remain on the agenda for 2024.
According to Maio, despite 2023 ending as a “lukewarm” year in hiring executives, professionals’ remuneration continues to grow. In almost all projects it was necessary to offer higher total remuneration, in the range of 15% to 30%. The long-term incentive in its different formats (stock optionsrestricted shares, retention bonus) continues to gain space in compensation packages, according to the consultancy.
Management
PageGroup, which has a more open range of professionals ranging from analysts to executives, sees the demand for managers growing next year. “The competition for this type of professional can provoke an intense battle for talent and possible salary inflation”, analyzes Lucas Oggiam, executive director of PageGroup in Brazil.
Among them are tax, planning and financial analysis managers, partly due to the initial changes brought about by the Tax Reform. Also by professionals specialized in renewable energy and ESG. Research by Page Executive (one of the PageGroup areas) indicates that, although 61% of boards monitor ESG issues, only 36% have at least one member who is a specialist in sustainability. “This technical gap makes this role crucial to meeting growing sustainability and governance demands,” says the company.
Functions that require knowledge of implementing artificial intelligence in business processes also gain prominence. In the financial market, the emphasis is on investor relations professionals. “First, the structures will focus on reestablishing themselves, recovering the lost AUM (assets under management), and then further enhancing their resources”, says the PageGroup report. Specialists in payment methods in fintechs, who need to develop more profitable and innovative products, will also be competing.
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