Can we collectively please stop saying the ‘ESG Talent War’?
It’s March of 2022 and there are currently around 7,000 global ESG jobs posted on LinkedIn*.
A phrase that is floating around about this abundance of these new hires; ‘there is a war for ESG talent!’, and firms are frustrated and upset that they can’t seem to hire quick enough, or people are leaving their teams way too soon.
Firms are keen to hire experienced ESG professionals who can ‘hit the ground running’ and make them a leader in the ESG space by tomorrow, but the talent pool is only so many meters deep if they think they need a ‘copy and paste’ hire from their competitor.
Firstly, I think we can agree that this phrase is not aging well, and secondly, as we get asked our thoughts on this by our new and current clients pretty much weekly, our opinion is that it’s simply not true if you really want to make the best hire who will thrive in your organisation, and want to stick around for years to come.
Assuming that an investment firm is looking to hire someone who is already doing the job at their competitor, then yes you are going to face several hurdles to try to attract the ESG talent:
Salaries and Benefits
Salaries are fluctuating massively which makes it difficult to benchmark now; people are getting higher bonuses, quicker than what is historically ‘normal’ promotions at their firm, and/or pay increases above the market rate. Now whilst this can be great to hear, if candidates were to want to move on to do the same thing somewhere else (which doesn’t really happen, but more on that later), we can be dealt with the golden handcuff scenario. Offers left right and centre for top candidates, with firms trying to entice them to move in exchange for more money, for them to just get bored and leave in a year.
Offering a WFH and office hybrid model (now to me, a ‘benefit’ is not hybrid working) is seriously taken into consideration exploring new opportunities. So yes, some will decide to move, sometimes to the shock of their manager, to do the same level job somewhere else if it means they can have a better work life balance. A poll I created a few months ago had 73% of people voting that when looking for a new role, they would only consider ones which offered a hybrid model*.
Now this is the cherry on top, the pièce de résistance, the real reason why people make the move, especially when they have not been at a firm for long (refers to the first point too). A few months ago, I posted a poll asking for people to vote on how often they reflect on where their career is heading, with a 76% voting that they frequently reflect every few months*. There is obviously a variety of reasons as to why people do this, naturally it’s wise to take a step back think about where your career is heading but sadly, we have heard that some firms are not emphasising where the role is headed for the future, and how much innovation and leadership the ESG team has for the overall company strategy. If it’s being left out of strategic meetings, that’s a big red flag.
There is an abundance of shiny new ESG roles going to market (whether they are a tick box activity or not is another point), search firms are also now hiring contingent ESG recruiters to work on ESG hires, to then work the same role as 3 other firms. People are getting approached weekly about several new roles, but often about the same role, by multiple search firms as well as the hiring manager or TA team too, with the aim that the ‘copy and paste’ ESG talent are being targeted. I spoke with a candidate recently who said on average she has 4 InMails a week(!) for ESG roles in London. They are consistently faced with new opportunities, and questions arise such as ‘shall I move for more money and a better life balance’, or ‘is this new company suggesting I would be on track to MD in 3 years rather than 8 where I am now?’ .
Now something I can agree with to a degree, is that the great resignation is happening in our (relatively) post pandemic world. People are moving on to reach a higher ceiling and obtaining a role which is aligned to what they picture their dream job is. It can be due to things such as infinite growth at a new firm putting the ESG strategy as the main priority, working alongside ESG veterans at a respected firm, or being able to develop an ESG strategy from scratch’ again and so on.
I hear very frequently that company culture is a big part as to why people think it’s time to leave, and this is something we highlight and inform our new clients on. When we speak with our candidates, we need to know the real reason for considering new roles, and if it’s culture then that will help us see if this opportunity is aligned to their dream job. Popular reasons as to why people move:
· Not promoting long standing employees because the firm prefers to hire externally, this makes their growth stagnant and leaves them feeling undervalued
· Promoting others above them with less experience
· Unfortunately, we do still see that ESG can be a tick box activity, firms are being publicly and internally scrutinised, with top-down communication issues – passionate ESG professionals get tired of this and want to join somewhere who is a leader or genuinely focusses on ESG/impact investing strategies
· Firms who don’t value just how important their employees are; some firms get comfortable thinking their employees are there for life (underpaid, or throwing so much work at them the firm assumes wouldn’t have time to interview elsewhere (yes, I am serious) or that it makes them feel fulfilled being a super busy ESG professional (burnouts within the ESG sector exist, perhaps a separate post on this another time)
Something which is always at the forefront of our minds here at Farrell Associates, and as I have been in ESG search for 4 years now (and I would still say in no way am I an expert), is that we know that there is always a solution to every ESG hire, and it doesn’t have to take months of negativity and discomfort to get there.
If you want to presume that the talent pool is finite because the hire you have open is struggling to get your ‘copy and paste’, then yes this market is pretty intense and firms could be paying 3x the market rate for someone who may leave in a year because they will be bored of doing the same thing...
We find our clients the optimum solution and usually it's not actually someone coming from a competitor doing the exact same role (would you believe it!). There are a variety of influences mentioned above that grab the attention of a job seeker, which help them evaluate what's important for them and what their career growth looks like within their current role. If we can keep this theory in the ethos of doing every single ESG and impact search, then you will make the best hire you have ever made.
Say you need a rising star who is well known in the ESG industry - what you actually need is an A player from a B firm, someone who has the passion to grow into the role and learn new things, whilst bringing new and fresh experiences into the team (both within life and work). Whether it's someone changing industries from a sustainability team at a corporate to a PE firm, or an academic climate change scientist moving into an ESG/impact research team.
We all know that diversity in the financial sectors, is nothing less than shocking. From ethnicity, to gender, to socioeconomic backgrounds, to cognitive diversity, THIS should be where we peel back the layers of the so called ‘ESG talent war’ and get our hands dirty in sorting this out once and for all.
We are facing an enormous global transition into ESG and sustainability. There is an abundance of people that have the skills, passion, and dedication to be the best hire, you just need to think differently about search and be open minded to get the best solution as people are your best asset. Like I said, if we have 7,000 jobs posted online, and it’s the ‘copy and paste’ talent only getting approached hoping that enough money thrown at them will entice them to move on, well it’s going to be a Groundhog Day forever. We can huff and puff, sulk and point blame, and all get frustrated about this ‘so called talent war’, but we are not a part of that.
* Investment Management, Financial Services, Private Equity & Venture Capital, and Management Consulting industries searched worldwide.
* 73% of 612 people that voted Yes, I need a hybrid style on “Would it be a deal breaker if it was 100% office”
* 76% of 144 people that voted Frequently (every few months) on “How often do you take time to reflect on your ESG role at your current employer, and where the direction of your career is going?”
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