Spain's executive search renaissance
Back in 2008 and 2009, Spain was hit particularly hard by the Global Financial Crisis. It had invested significant amounts in property redevelopment, and when the recession hit the consequences were great. The country, along with many other Southern European countries, struggled with high unemployment rates and public unrest, before being caught up in the Eurozone Crisis.
Alejandro Gortari, Partner, Gortari Associates TRANSEARCH, describes the environment for search during this time: “During 2009 the market suffered a drop of about 50% of its activity,” he says. “As the number of firms and consultants remained, the level of pressure in the business increased significantly…Due to the high rate of unemployment, many companies have been able to recruit good professionals without requiring the services of external consultants.”
But there are signs that the economy is beginning to bounce back. Recent statistics from the Spanish Labor Bureau reveal that unemployment fell faster than expected in the second quarter of 2014, as the number of employed people grew by 402,400. As it stands the unemployment rate is 24.5%, meaning it is still one of the highest in the developed world, but with a net gain of 19,400 jobs in the last year, it appears that Spain is emerging from a six year economic slump.
“The Need To Grow And Innovate”
Jose Medina, Managing Partner, Odgers Berndtson, says: “The main drivers and indicators have been that, after a double recession between 2007 and 2014 and maximum reductions of resources pointing to lean and mean organizations, there is now the need to grow and innovate. There is obviously a need for executive talent.”
Luis Truchado, Founder of Eurogalenus and Partner, AIMS International, agrees, explaining that in some respects the economic conditions since 2008 have led to greater clarity of when retained search should be used and what the benefits are. “We are now seeing a recovery and some clients are coming back,” he says. “We have to understand that they may stay with contingency recruiters for mid-level but for senior searches they need a consultant and all the extra value. We’re now getting the most conscious clients – those who appreciate the value of retained search. In the past we would have been offered some mid-level searches that were very tempting, but that is no longer happening.”
This trend is not unique to Spain, or Southern Europe; the AESC’s ‘State of the Industry Statistics’ (see page four) reveal that the average fee per assignment is rising on a global level, as search is typically moving up the value chain and being used for more challenging, and global, roles. Gortari explains: “Clients have recently been requiring more searches and there has been an increase in fees. Companies are now searching for managers with new ideas for business growth, in order to focus on mid-term plans, rather than the short-term. These changes have forced search firms to adapt their business model. They have answered by promoting other services, such as assessment, management consulting and board services.”