Global Workforce Disruption Reintegrating Displaced Executives Bridging the Experience Gap Relaunching Executive Careers

Introduction.

Global labour markets are experiencing unprecedented disruption due to technological transformation, economic uncertainty and shifting demographic realities.

Organisations worldwide are undergoing significant restructuring, resulting in the displacement of experience executives and professionals across all sectors.

This phenomenon is particularly pronounced in developing economies, including South Africa and across the African continent, where economic volatility compounds the challenges of professional reintegration.

The recent cessation of donor funding from USAID and other donor organisations has seen major disruption in the NGO and NPO sector, resulting in the displacement of significant numbers of professionals and field staff in these organisations.

Besides the disruption of continued employment and sustainable livelihoods amongst executives and professionals, the restructuring and displacement of skilled employees, has had an unintended consequence, i.e. the sustained attrition of institutional know-how and experience, and competencies and skills.

The Human Capital Group, in conjunction with our global colleagues in the Career Star Group, via the work that we do in career transition and outplacement across the globe, have become patently aware of this dynamic and resultant market inefficiency.

Clearly, there is a socio- economic imperative and business case for a structured intervention in this regard.

This discussion paper will address

·         The Reality of the Executive Displacement Challenge.

·         Key Executive Displacement Factors.

·         Economic Consequences/Costs of Executive Displacement.

·         Macro- Economic Productivity Loss.

·         An Executive Relaunch/Reintegration Framework.

The Displacement Challenge: Is It Real?

A Global Context.

Recent research data points to approximately 40% of global companies engaging in significant restructuring during 2024.

It is estimated that globally some 3.2 million professionals at management level and above have been retrenched. (McKinsey & Co, 2024).

Deloitte Global Human Capital Trends, 2024 report that 67% of companies participating in their survey are experiencing difficulty in filling strategic leadership positions, indicating that so-called experience gaps are a primary concern.

Paradoxically, this indicates that there are a systemic inefficiencies in reintegrating experienced talent into the mainstream economy.

An African Context.

The African continent presents unique challenges and opportunities in this domain. Africa has the world’s fastest-growing working age population, accompanied by accelerating economic development and the need for ever accelerating economic development, and yet the need for experienced talent remains acute.

Africa is a continent is often tyrannized by significant structural economic challenges and so executive employment experiences significant volatility.

South Africa.

South Africa, the largest economy on the African continent, presents with a self-inflicted dilemma in respect of executive displacement.

It exacerbates structural maladies in the functional executive competency environment with ill-considered socio- economic re-engineering, economic restructuring and demographic transition, essentially a continuation of so-called job reservation policies prior to 1994.

The injudicious application of Broad-Based Black Economic Empowerment, designed to address critical historical inequalities in the South African labour market, i.e. the imposition of so-called ethnic employment quotas on corporate South Africa and hence essentially disposing of meritocracy in employment practices, resulting in unintended consequences relating to executive displacement and executive incompetence.

Recent research indicates that South African executives over 50, experience unemployment periods averaging 60% longer than their younger counterparts, despite possessing an average of 25+ years of relevant experience (South African Board for People Practices, 2023). It goes without saying that economic efficiency will suffer; equally, the opportunity for knowledge transfer in a developing country, transfer so sorely needed in the South African economy, has been missed.

Key Displacement Factors.

Amongst others, for primary factors drive executive displacement globally.

·         Age-Related Barriers.

Research data consistently indicates that professionals over 50 experience significantly longer periods of unemployment following displacement.

This phenomenon is especially prominent in South Africa, with studies indicating that executives in this age category receive 70% fewer interview invitations, despite significant qualifications and experience. (University of Cape Town Business School, 2023).

·         Structural Economic Transitions.

It appears that economies undergoing significant structural changes, particularly resource -dependent economies, diversifying toward service and knowledge sectors – experience heightened executive displacement.

South Africa is a particularly significant example in this regard as a result of ever-increasing de-industrialization and the decline of the mining industry.

·         Digital Transformation Gaps.

There may be a perception that experienced executives, especially in the 50+ demographic,, lack digital fluency and as a result are not always readily considered for reemployment.

Research indicates that this perception is frequently misaligned with reality. Research results indicate that 72% of executives over 55 demonstrate digital adoption rates comparable to their younger cohorts when provided with appropriate onboarding. (World Economic Forum, 2023).

·         Policy Implementation Challenges.

South Africa especially is an example of the implementation of discriminatory employment policies.

The so-called apartheid government had implemented a policy of job reservation, a policy which reserved certain employment positions for whites only.

Post-1994, following the advent of democracy in South Africa, the governing party has resorted to the implementation of ever stricter so-called employment equity policies without knowledge transfer measures. Besides the unintended deficits in functional experience and functional know-how, intentional displacement has manifested.

Economic Consequences/Costs of Executive Displacement.

Executive displacement have economic implications which impact on both individuals as well as on organisations/companies. These include:

Economic Impact on Individuals.

Research indicates that displaced executives experience income reductions of up to 45% over the 5 years following displacement. This phenomenon is especially present amongst executives who are older than 55. (Harvard Business Review).

Again, in the South African context, displaced Caucasian executives 55 years and older are at a significant disadvantage in terms of being re-established in a corporate environment.

Organisation Knowledge & Experience Deficit.

Organisations losing experienced executives without engaging in a concerted and structured knowledge and institutional know-how transfer programs report significant operational disruptions, with an average of 23 months required to re-establish required levels of experience and know-how and institutional knowledge. (Forrester research, 2024).

Macro-Economic Productivity Loss.

The potential macroeconomic productivity loss is vast and wide. Qualitative considerations could include:

·         Organisation Instability.

·         Diminished Innovation Capacity.

·         Interrupted Skill Transfer.

·         Reduced FDI.

·         Declining Global Competitiveness.

Estimates in respect of quantitative impact in the South African context indicate the following:

·         Immediate annual productivity loss of up to US$1.27 billion.

·         Long-term annual productivity loss of up to US$2.54 billion.

·         2.60% of South Africa’s GDP

An Executive Relaunch Framework.

There is an economic imperative to develop a structured and comprehensive framework and intervention to address the marginalization of displaced executives.

The Human Capital Group, in tandem with the work that we do on the executive search and specialist talent sourcing front, the career transition and outplacement front, the career strategy front as well as the executive and career coaching front, have developed a structured process to assist displaced executives to reintegrate into the productive economic landscape.

In short, the components of the intervention are as follows:

1.    Comprehensive Assessment and Functional Experience and Know-How.

The foundation of effective reintegration is a thorough assessment of the executive's capabilities, experiences, and transferable value. This process involves quantifying achievements, identifying transferable skills, and evaluating leadership competencies against current market demands.

2.    Value Proposition Reconstruction.

Displaced executives frequently struggle to articulate their value in contemporary terms relevant to current market needs. Our methodology includes a systematic approach to reconstructing and communicating executive value propositions through modernized documentation, digital presence optimization, and narrative reconstruction.

3.    Market Re-Entry Strategy.

Conventional job search mechanisms are particularly ineffective for experienced executives. Our approach emphasizes strategic market mapping, decision-maker identification, and direct approach methodologies. This component includes both opportunity identification and access protocols.

4.    Ongoing Support

Successful reintegration requires sustained engagement and adaptation. Our framework includes both group and individual coaching methodologies, peer support mechanisms, and progress monitoring tools to ensure successful transitions.

5.    Digital Enablement

Technology serves as both an enabler of program delivery and a mechanism for market connection. Whilst most of the work that we have done to date is face-to-face in individual or group format, we are in the process of creating a digital platform which integrates assessment tools, value proposition development resources, market analysis resources, market access mechanisms into a cohesive reintegration ecosystem.

Conclusion.

The displacement of experienced executives certainly presents economic productivity inefficiencies in South Africa and globally.

As workforce disruption accelerates in a distressed economy, the need for structured approaches to executive reintegration will only increase.

 Individuals that successfully navigate this challenge will gain significant competitive advantage in terms of access to gainful employment and successful and productive economic participation.

By the same token, organisations that successfully navigate this challenge will gain significant competitive advantage through access to experienced executive and leadership talent currently underutilized in the market.

 The Human Capital Group is a South African organisation and leadership, and management development company established in South Africa some 22 years ago.

Our vanguard solutions include

·         executive search and specialist talent sourcing;

·         career transition and outplacement solutions;

·         career strategy coaching and facilitation;

·         executive and career coaching.

We have a global footprint via our membership of the Career Star Group and our associate relationship with Horton International.

W Brian Wasmuth.

Managing Partner.