Table of Contents
Global Salary Changes
According to a recent report, executive salaries are expected to increase by an average of 4.9% in 2023, globally. This is the highest projected salary increase in over a decade. The report also found that inflation is playing a major role in driving up salaries, with over half of employers planning to increase salaries in response to rising inflation.
In the UK, executive salaries are expected to increase by an average of 4.6% in 2023. This is the highest projected salary increase in the UK since 2008. The UK is also experiencing high inflation, with the Consumer Price Index (CPI) at a 40-year high of 9.9% in August 2023.
In the US, salaries are expected to increase by an average of 5.3% in 2023. This is the highest projected salary increase in the US since 2006. The US is also experiencing high inflation, with the CPI at a 40-year high of 8.5% in July 2023.
In Europe, salaries are expected to increase by an average of 4.2% in 2023. This is the highest projected salary increase in Europe since 2008. The war in Ukraine is having a significant impact on the European economy, and inflation is rising in many European countries.
Hiring Activity
Hiring activity at the end of 2023 is expected to be strong, with many companies planning to hire new executives to help them navigate the current economic challenges. According to a recent survey by the Association of Executive Search Consultants (AESC), 82% of executive search firms expect hiring activity to remain strong or increase in the second half of 2023.
Outlook for 2024
The consensus outlook for the leadership and executive recruitment market in 2024 is positive. However, there are some challenges that could impact hiring activity, such as the war in Ukraine, rising inflation, and a possible recession.
Despite these challenges, many companies are expected to continue to hire executives in 2024. This is because executives play a critical role in helping companies to achieve their strategic goals through good times and through bad. In addition, the demand for executive talent is expected to remain high, as the “baby boomer” generation retires and companies look to replace them as part of their succession plans.
Reasons for Strong Hiring Activity
There are a number of reasons why hiring activity in the leadership and executive recruitment market is expected to remain strong at the end of 2023 and into 2024.
- Economic growth – The global economy is expected to continue to grow in 2023 and 2024. This will lead to increased demand for goods and services, which will in turn lead to increased demand for executives.
- Retirement of the baby boomer generation – The baby boomer generation is retiring at a rapid pace. This is creating a shortage of experienced executives, which is driving up demand for executive talent.
- Increased focus on diversity and inclusion – Companies are increasingly focused on diversity and inclusion at the executive level and realise the benefits this brings to organisations. This is creating new opportunities for executives from diverse backgrounds.
- Need for digital transformation – Many companies are undergoing digital transformation. This is creating a need for executives with digital skills and experience.
Conclusion
The leadership and executive recruitment market is expected to remain strong in 2023 and into 2024. This is due to a number of factors, some of which we have explored in our market update. The reality is, the best companies need strong and continually improving leadership through good times, as well as bad. Navigating difficult macro-economic conditions is a focus for most major companies as the threat of impending recession and inflation continue to rise.
Sources:
- Korn Ferry 2023 Global Salary Survey
- Office for National Statistics (ONS)
- US Bureau of Labor Statistics (BLS)
- Eurostat
- Association of Executive Search Consultants (AESC)
