Insights
Q4 2005 State of the Industry Report
Retained Executive Search Gross Yearly Revenues Up 16.5% Over 2004
Continuing the trend in growing revenues within the retained executive search industry, the latest quarterly AESC State of the Executive Search Industry report showed an annual increase in gross revenues of 16.5 percent. Despite a minor quarterly decrease in gross revenues from Q3 to Q4 (-1.8 percent), the number of searches started saw a slight quarterly increase of 1.7 percent.
In Europe, the Middle East and Africa, the number of retained executive searches started in the fourth quarter of 2005 as compared to the third quarter increased by 7.4 percent — the largest increase among the four markets analyzed in this report. All regions tracked by the AESC showed net increases for the quarter, with the exception of Central/South America (-12.3 percent). Searches started in North America increased by 1.6 percent and Asia Pacific 2.0 percent.
Commenting on these trends, AESC President Peter Felix noted: "The continued strength of retained executive search consulting around the globe during 2005 is evidence of dynamic growth and change and the need for organizations to be critically concerned about their human talent and leadership resources for the future. So many countries and economies are experiencing restructuring and the need to hone their competitive edge in the changing world order that the search for talent has become a high priority. Added to this are underlying trends of executive mobility and demographic changes such as an aging workforce and the retirement of the baby boom generation, all of which contribute to strong demand for the best executives, and thus executive search services.
In Europe the continued growth in demand underlines the relative strength of the major economies, particularly the UK and the resurgent German economy.
Overall, current conditions for senior executive search consulting represent among the best that we have experienced in recent years with strong growth coming from all major sectors and most major economies."
In 2005, Europe captured the second largest market share in number of searches started worldwide with 35.3 percent as compared to North America which held 43.6 percent. Searches started in Asia Pacific continued to grow with 13.9 percent of the global market.
The financial services sector captured the largest percentage of new searches started in 2005 with 22.8 percent, followed by the industrial sector at 21.7 percent, consumer products at 17.7 percent and technology at 17.0 percent. Peter Felix commented: "The strong balance between the major sectors for executive search is highly encouraging and suggests that the profession is not now too dependent on one sector as it became in the high tech boom of the late 1990s".
The data from this report was collected from a sample of AESC member search firms representing the activity of over 1,200 executive search consultants in 215 offices, located in 42 countries worldwide. AESC access to quarterly 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.