Senior Client Partner, North America Leader, Financial Officer Practice
The Recession-Proof Executive
The executive looked at his stock options and winced: underwater. And the latest company earnings? Wince-worthy. Was it time to jump ship? He looked at the roller-coaster stock market and sky-high inflation.
Leaders around the world are quietly considering their job options, wondering whether they should hunker down for the coming economic flux, or take the leap to a potentially more lucrative job. But to where? Experts say that in this downturn in particular, firms seem bent on keeping or hiring the top-tier talent for a variety of reasons. “Good executives are scarily recession proof, says Barry Toren, leader of the Financial Officer practice for North America at Korn Ferry. “But am I talking about B and C players? No.”
To be sure, some industries like tech and recruiting are already seeing layoffs, but experts say that top talent have much less to worry about. Part of the issue is that under the massive digital transformation firms are undergoing, the need for highly skilled executives to oversee such change has become critical. In addition, many firms let go of top talent during the start of the COVID-19 era, and were caught flat footed when the economy took an unexpected jump a year ago. “I guarantee you that the top quartile is not being let go,” says Craig Stephenson, managing director of the CIO/CTO practice in North America at Korn Ferry. “It’s the ones with performance or management issues.”
A shortage in agile leadership remains an issue across industries as well. Korn Ferry research shows that about 14% of leaders are able to perform and transform simultaneously, which is the holy grail of leadership. These high-performing leaders are particularly valued in recessions, says Alan Guarino, vice chairman of the CEO and Board Services practice at Korn Ferry. “High-performing leaders create highly participatory teams, and in a recession this gives the company a highly competitive advantage,” he says. Agile teams are able to see opportunities and adapt quickly to changing conditions.
Career pros suggest executives with these skills look for a dependable, stable position among market turmoil. While many firms have a knee-jerk tendency to head toward safer industries like healthcare, experts suggest focusing on what a company offers. “You want to look at organizations that are going to solve upcoming problems, or that offer essentials,” says Jane Stevenson, global leader of the CEO Succession practice at Korn Ferry.
Within those organizations, experts note that highly skilled executives are highly sought after in growing specialties like data and automation, as well as commercial roles that build tangible profits. This can even apply to roles like chief sustainability officer, a position that involves identifying operational efficiencies and implementing long-term corporate resilience. “If they’re doing their job, letting them go would be quite shortsighted,” says Victoria Baxter, senior client partner at Korn Ferry with an expertise in social impact and ESG.
Chief marketing officers and their lieutenants commonly find themselves at risk during downturns, says Ann Vogl, senior client partner in Korn Ferry’s Marketing Officers practice. The hazards are particularly sharp for chief marketing officers who have not aligned themselves with the expectations and goals of the CEO. “The better you do that, the more secure you are,” she says. The key is to drive the financial results that the CEO desires, such as new sales and new customers—not marketing results. “Nobody cares how many emails were opened,” she says. Experts point out that one type of leader checks all these boxes: innovative performers who can reliably run operations. “They’re solution focused, able to see both opportunities and challenges, and also able to see silver linings,” says Stevenson.