Search Revenue Down Last Quarter, But Future Looks Brighter

May 9, 2012

Executive searches were up, but revenue was down in the first quarter, as uncertainty about the future gripped companies.

The Association of Executive Search Consultants (AESC) reported the number of new searches was up 2.5% over the last quarter of 2011. The increase wasn’t enough to compensate much for the continuing decrease in revenue. Search firms reported 6.3% less revenue in Q1 than they did for Q4 2011.

“Many search consultants have felt continuing uncertainty in demand from their clients as economic turbulence persists in various parts of the world,” said AESC President Peter Felix. “…there is no doubt that confidence in the executive search market has declined since the end of last year and is unlikely to fully recover until we see clients regain their confidence about the future and again start searching for that rare commodity: executive talent.”

A CareerBuilder / Headhunter survey says that may already be happening. Conducted two months ago, the survey found 31% of the responding HR professionals and hiring managers expect to fill executive-level positions in the next six months. That doesn’t mean they’re planning to engage outside search firms — many of the larger firms now are in-sourcing senior-level recruiting. However, it is an improvement over the 23% who planned executive hiring in CareerBuilder’s fall survey.

The survey found 24% of the employers reporting hiring plans say they’ll be looking to fill business development position; 23% will fill IT slots; 22% will hire for sales executive positions, and 19% each in marketing and accounting/finance.

Finance hiring in particular has been soft, not only for executive positions, but in most levels. In the April jobs report from the Bureau of Labor Statistics, more of the finance sector saw losses. Commercial banking shed 3,500 jobs.

When companies do have senior jobs to fill,  says CareerBuilder, most want someone with prior experience in their industry, though 35% say they’ll at least consider outsiders. For 62% of them, “Proven ability in addressing problems with effective solutions” is the most important consideration.

If you do get a call about a search, one of the other considerations you may be asked to keep in mind is diversity. CareerBuilder says, “More than one in five (22 percent) companies still do not have female executives, and two-in-five companies (41 percent) do not have executive-level employees in any of the following demographics: African American, Hispanic, Asian, LGBT, Disabled, etc.”

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