Insights
Q3 2008 State of the Industry Report
Senior Executive Search Slowing But Still Robust - Q3 2008 State of the Industry Report
Q3 2008 State of the Executive Search Industry Report reveals that the need for high quality senior executives to steer business through a recession continues to be recognized. In the third quarter of this year, net revenues from executive searches worldwide grew by 2.8 per cent.
Third quarter data on the worldwide retained executive search industry revealed a slight slow down in searches and revenues following four consecutive years of positive industry growth, according to a report released today by the Association of Executive Search Consultants (AESC).
In the third quarter of this year worldwide executive search revenues declined 6.3% from the previous quarter, accounting for the first quarterly drop since Q4 2006. Year-on-year executive search industry revenues grew 2.8% annually in the third quarter of 2008, but this represented the least year-on-year growth since Q1 2005.
Peter Felix, President of the AESC commented, “As might be expected in the light of the current economic turmoil, executive search clients are being more cautious about initiating new senior hires than they were earlier this year. Nevertheless, the extent of the decline in worldwide revenues for the industry is still relatively minor and many parts of the world and many sectors are still showing strong demand. I am confident that once the current uncertainty abates and organizations begin to plan their way out of recession that executive search consultants will see strong demand from clients who require help in finding and recruiting the best talent available to them. Executive talent is still in very short supply around the world and only few organizations will ignore the necessity to invest in their leaders for the future.”
The number of retained executive searches started worldwide in quarter three this year declined 3.5% annually as compared to the third quarter of 2007. Searches decreased in all regions except Central/South America, which rose 18% from Q3 2007. Europe experienced the largest yearly decline in searches, down 7.6%. Asia/Pacific followed, down 5.2% year-on-year, and then North America, falling 2.1% from Q3 2007 to Q3 2008.
The quarterly trend also saw a drop in the number of searches started globally, down 6.1% from Q2 2008 to Q3 2008. Europe again witnessed the largest decline, down 10% quarterly, then came Asia/Pacific (-9%), Central/South America (-6%), and North America with the smallest quarterly decline (-2%).
Searches started in the Industrial sector experienced an 11% yearly increase from Q3 2007 to Q3 2008. Life Sciences/Healthcare, whilst remaining flat annually, rose 9% quarterly from Q2 2008 to Q3 2008. Professional Services fell 16.4% year-on-year from Q3 2007 to Q3 2008 (from a small sample), followed by Financial Services (-13.1%), Consumer (-9%), and Non-Profit (-6% from a small sample).
The average fee per executive search assignment increased 7.8% annually from Q3 2007 to Q3 2008, but fell 2.2% quarterly in Q3 2008. The average revenue per consultant dropped 5.1% from Q3 2007 to Q3 2008, the first decline witnessed in revenue per consultant since this yearly trend was first recorded in Q1 2005.
The data was collected from a sample of AESC member search firms representing the activity of over 1,500 executive search consultants in 46 countries worldwide. AESC access to job search data positions this Report as a leading indicator of the future worldwide job market and a barometer of hiring trends in key market sectors.