SENIOR EXECUTIVE RECRUITMENT SUFFERS
SENIOR EXECUTIVE RECRUITMENT SUFFERS FIRST BLOW FROM CRISIS
Critical hiring of corporate leaders declines in the fourth quarter of 2008
following five years of outstanding industry growth
Worldwide executive search industry revenues plateaued in 2008 following half a decade of outstanding growth for the 50 year old profession which now counts annual revenues of $11 billion. In 2008 industry revenues grew only three per cent annually against a 22 per cent growth rate in 2007. Responding to what some consider to be the worst recession in the post-World War II era, the last quarter of 2008 saw worldwide revenues fall 14 per cent against the same period the previous year, with a 21 per cent decrease in the number of searches started in that period, revealed the Association of Executive Search Consultants (AESC) today.
The role of corporate leaders is even more critical during a time of crisis, which explained why the senior recruitment industry resisted the down turn for much of last year. Fourth quarter data, however, unsurprisingly showed a fall in searches and revenues as decision makers put a freeze on hiring, particularly in November and December following the Wall Street catastrophe in October. The need for excellent management teams to steer organisations through the recession will undoubtedly re-fuel the growth of the profession as the economy rebounds. There is still evidence of a talent shortage from the past five years which will continue to affect organisations as they seek out the best and the brightest to manage their affairs, commented AESC President Peter Felix.
Asia Pacific experienced the greatest yearly decrease in the number of search assignments in quarter four 2008, falling 22 per cent against the same period in 2007, followed by Europe (-21.3%), North America (-21.1%), and then Central/South America (-16.4%).
Mr. Felix further remarked, Trends in the senior recruitment industry often act as an indicator of wider economic trends as strategic talent management responds to changes in world markets. We are hopeful that the hiring freeze in North America will be replaced quickly by a crisis recovery mode as organisations focus on the vital issue of leadership, thereby stimulating recovery in other parts of the world.
By quarter four 2008 the industrial sector had clearly overtaken financial services in leading industry market share. Predictably financial services has also suffered the most significant annual decline in executive searches, followed by the technology and consumer sectors. Professional services also experienced a distinct annual decline in searches.
In contrast to decreasing worldwide executive searches and revenues in quarter four 2008, the average fee per executive search assignment increased both quarterly and yearly, indicating a very senior level of executive search activity currently taking place within the industry.