Apr 16 2014
|Taking stock of an industry's, company's or even one's personal situation is always a challenge. It depends when you do it, how you feel and who you talk to. Nevertheless let me try. Where do we think the retained executive search profession is today, how healthy is it and what is our forecast for the future?|
First and foremost, for many of our firms 2013 was a better year than 2012. Recovery in demand occurred especially in the US, the largest market, but also in the UK, Germany and France, the second, third and fourth largest. Our global industry statistics, published last month showed an overall growth of 6% in annualized revenues, but clearly driven by the US.
The good news is that the global economy is broadly in recovery and that this fact alone is raising the water level for executive search and driving new demand. Our member firm outlook survey for the first six months of this year was overwhelmingly positive. But why else is there new demand? As we saw during the recovery in the mid-2000s, there is a direct correlation between underlying megatrends such as the shifting demographics in the developed economies, the growth of free enterprise economies in the developing world, and the demand for executive search. These forces are driving a fundamental executive talent shortage but it becomes acute once organizations recognize that they can and must move from cost control to growth mode.
This change can occur quickly as we have seen in the past year in the US. Top management realize that they cannot sit on their hands as many have been doing since the financial crisis and that longer term, growth-related decisions about the executive team have to be made if the organization is to remain competitive. Factors such as digitization and industry transformation also drive this change and can become imperatives to be ignored at one's peril.
On the mirror side of these trends is executive mobility which becomes a significant factor in talent shortage once the market becomes more liquid and there is more confidence in the air. Executives tire of organizations that have only been feeding on resource constraints and cost controls and for many the only way to achieve salary growth is to move companies. Our executive compensation report indicates that many senior executives are dissatisfied with their current environments and would favor a move.
Of course, it is not all good news. The commoditization of the lower end of executive search; disintermediation by in house recruiting functions and continuing pressures on terms and conditions of doing business, especially in the emerging markets. These pressures are essentially driving retained executive search into the "blue water" of higher level searches, leadership consulting and the realm of the trusted advisor.
|This article was written by Peter M. Felix, President at the Association of Executive Search Consultants (AESC) and BlueSteps.|
About the Association of Executive Search Consultants
The Association of Executive Search Consultants (AESC) is the worldwide professional association for the retained executive search and leadership consulting industry. The AESC promotes the highest professional standards in retained executive search and leadership consulting through its industry recognized Code of Ethics and Professional Practice Guidelines. The AESC also serves to broaden public understanding of the retained executive search and leadership consulting process and acts as an advocate for the interests of its member firms.
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