The talent crisis as sector complexity impacts succession

The housing sector is facing unprecedented challenges, even when compared to the austerity years of the early 2010s, when rent cuts and public sector spending freezes drove large scale efficiency programmes and transformation. With the biggest change to regulation for over a decade, new legislation, asset management complexity and squeezed capacity senior leaders are reflecting much harder on career progression.

Greenacre Executive Leadership Lounge includes some of the sector's most talented Directors and early career Executive leaders, representing housing associations, local authorities and ALMOs from the length and breadth of the country of every shape and size. From large national providers and G15 through to small regional and local community-based landlords. I’m lucky enough to Chair this forum, jam packed full of rich insights, shared learning, and frank conversations. 

As one of the housing sector's fastest growing recruitment and leadership development agencies, Greenacre Executive and Greenacre Recruit noticed that many leaders who may have previously been considered as candidates for progression were reflecting more and, in some cases, staying in current roles or even leaving senior leadership roles to become interim Directors or consultants. 

At a recent Leadership Lounge, we explored this, the results were illuminating and highlighted a potential cliff edge for the sector as more leaders decide to do something different or stay in current roles. With a strong network of first appointment CEOs, I also tested this concept and dug into to what newly appointed executive leaders really need and what might be causing emerging talent to vote with their feet.

A recent survey highlighted that almost 40% of leaders felt that appetite to progress within their peer group was low.

With a third feeling that hiring panels perceived high levels of risk in making first appointment hires, driving future talent to think “what’s the point in applying.”

Finally, 25% of respondents felt that a lack of investment in personal development and training was also hampering progression.

So, there you have it - hiring managers are not taking a risk on first appointment leaders. We are not equipping future talent to be ready for today’s challenging roles and operating environment complexity and as a result there is a lack of appetite in the exact cohort the sector needs so badly and the real engine room of capacity and skills. 

Exploring what might be driving fatigue and disillusionment, we also reflected on the reality of operating environment challenges, with almost two thirds of leaders highlighting how squeezed capacity was driving elongating asset investment programmes, potentially creating a misalignment with the needs of strengthened policy and regulation and rising resident and environmental expectations. Stalled or scaled back development programmes were also noted with over a third citing the tactic as being used to balance the books and sustain business plans. Whilst these approaches are not surprising, given the high cost of borrowing, the current state of sector interest cover, with the Regulator for Social Housing reporting lower quartile interest cover at 76%and median cost per property up 12% at £5,136 it does illustrate in stark terms the complexity first appointment leaders are facing and potentially creates an argument for turning backs on career progression in the traditional sense. 

Not wanting to give up hope and be part of the solution for creating the conditions for success, I spoke to my network of first appointment CEOs, some brand new and some further in - from that tentative first year of blinking into the light,  picking up the keys and the responsibility that goes with it to those with a bit more under their belt.  They told me about not being defined by their career progression route - for example, a previous FD not diving into the comfort zone of the numbers but embracing the world of housing management and resident engagement. Also notable, was taking a self-driven approach to early personal development, for example attending the NHF Finance Conference in Liverpool, because it’s not a conference for FDs. It’s a conference about the economic landscape leaders are navigating and finally being brave enough to recognise gaps in experience and creating an executive team that can grow together to navigate the choppy waters that the sector is facing.

A recent Housemark Maximising Value report, revealed the sector's first direct correlation between culture and financial performance, with landlords reporting higher employee satisfaction, leading to better tenant satisfaction and ultimately a stronger operating margin, so there has never been a more important time to create the cultural conditions for success and we aren’t going to be able to do that without the best talent stepping into those key leadership roles. So, here is my call to action for Boards and Remuneration Committees everywhere - it might be complex, and you will be making tough, trade off decisions routinely, but look long and hard at those strong Directors who are out there delivering asset programmes, improving resident service delivery, creating capacity and leading transformation and enabling services. The skills this cohort have are the backbone of the housing sector and if we don’t motivate them, support them and create the conditions and succession plans that move them into tomorrow’s roles, we will see a mass exodus from the talent pool at the very time we need it. 

Here are my Top 5 tops for enabling progression:

1. Give functional leaders cross functional projects to manage, this will expose them to different stakeholders, increase their organisation profile and move them outside of their functional silo.
2. Produce capacity plans to work in tandem with succession plans, think about future needs, future skills and future technology and start investing in leadership development and create talent pools now.
3. Expose talent to sector wide opportunities - clubs, forums, professional networks, sector wide conferences and events and keep leadership plugged into economic, political, and operating environment context to ensure they have a breadth of knowledge and plenty in their professional tool kit to tap into.
4. Develop support networks and rhythm that works for everyone, understand aspirations, needs and preferences and the things that keep your leaders awake at night. 
5. Manage teams as individuals and help them to establish peer networks so they don’t feel alone. Also consider job shadowing so teams understand your role and support networks.

Amanda Leonard is the Founder and CEO of Perfectstorm, a consultancy working across the housing sector on growth, stakeholder engagement, transformation and resident led service design. She Chairs Greenacre Executives Leadership Lounge, following a 20-year career in FTSE 100 and global organisations at executive level.