By: Lee Kester, CEO & Founder of Kester Search Group®
It’s been a wild ride over the past 5 years in the business world. With numerous challenges, including elections, a global pandemic, supply chain issues, geopolitical tensions, inflationary pressures, an insanely tight labor market, staffing issues throughout healthcare, and sky rocketing interest rates, we have all experienced quite the rollercoaster.
So, when it comes to planning for 2024, where do you even begin?
At Kester Search Group, we are seeing executives turn their focus to sustainable and profitable growth for 2024. Below are three topics that seem to be front and center as companies plan to move in this direction.
1. AI – AI is playing a transformative role in healthcare as well as recruiting. We are seeing companies investing lots of time and money in research and development to introduce innovative technologies to improve their products and services. Companies such as Tempus are at the fore front of this revolution https://www.tempus.com/, utilizing AI and machine learning to analyze clinical and molecular data, with the goal of providing personalized and more effective treatment options for cancer patients. One article that illustrates the impact of AI on healthcare, came from J&J: https://www.jnj.com/innovation/artificial-intelligence-in-healthcare.
2. Companies are ramping up their sales & marketing efforts more affordably.
Trends we are seeing to support this strategy are:
- Some companies are experimenting with the hybrid approach of Inside & Outside sales professionals. Companies that used to have 20 outside sales reps at $200k total comp per rep, are now reducing that team to 10 outside sales rep at the same comp, and increasing their inside sales rep teams at a lower comp. The inside reps are more affordable, and are still able to do full sales cycle, while also setting up appointments for outside reps to act on.
- There has been an uptick in associate sales rep expansion projects lately. In addition to an increased focus on inside sales, we are also seeing companies hire entry level outside sales reps (reps with a college degree and 2-4 years B2B sales). These younger reps are more affordable and are helping the senior territory managers run their regions.
- We are noticing a bit of a return to the ‘hire on potential,’ where clients are seeking talent that is more affordable rather than ‘over-paying’ for the rolodex of relationships. Executives are hiring for coachability and personality and training those individuals to be successful in their roles.
- Companies seemed to be more focused on digital marketing efforts, allowing them to reach larger audiences in a more cost-effective manner than traditional marketing and sales efforts. Given the new “hybrid work environment” we are living in, companies are also investing in market research prior to engaging a sales rep so that their reps are properly teed up when approaching a sales lead.
3. Sustainable Profitable Growth – Investors, both public and private, are prioritizing sustainable growth and profitability vs. top line growth at any cost. This is leading to a return to ‘common sense’ capitalism and a renewed focus on value creation, not speculative future top line revenue predictions. When interest rates were low, companies had a “grow, grow, grow” mentality. Now that rates are higher, companies have pivoted their strategies to focus more on sustainable profitable growth.
Look at Warren Buffett’s Investment Philosophy. Buffet describes himself as a “value investor,” searching for stocks that are believed to be undervalued by the market or that aren’t recognized by most other buyers.
You can also look at the fact that only 38% of all publicly traded companies are all profitable. We will see a real change on this front where companies will go out of business if they do not see profitability, and companies with a longer history of sustainable profitable growth success will continue to take off.
Companies are making impactful strategy changes to adapt to this higher interest rate market. The phrase, “If you are not growing, you are dying,” seems more relevant than ever yet a focus on profitable growth seems to be at the forefront of many executives plans.
Over the next year we will see that AI + Technology will all play an extremely important role in the future of healthcare and executive search. Companies will also remain focused on growing their business and being successful but will find more cost-effective ways to do so with their sales and marketing teams.
With that being said, Kester Search Group is still a firm believer that people currently are and will always remain a company’s greatest asset, and that “business truly is it’s people.” As you plan your strategy for 2024, please let us know if we can help you build your team to ensure the talent is in place that is needed to drive revenue, market-share, and profitability.