Insights
Q2 2007 State of the Industry Report
RETAINED EXECUTIVE SEARCH INDUSTRY CONTINUES ROBUST GROWTH WITH 20% YEAR-OVER-YEAR REVENUE INCREASE IN Q2
In a remarkable example of sustained growth, the global retained executive search industry recorded yet another year-on-year increase in net revenues. In Q2, 2007 global industry revenues increased by 20%, as compared to the same period the previous year, according to the latest quarterly AESC State of the Executive Search Industry Report. The average revenue per consultant also experienced an annual increase, up 6.7% from Q2 2006.
Peter Felix, AESC President, commented, “Senior level executive search activity is always an indicator of growth, of change and of strategic development. In the past four years we have witnessed the unusual phenomenon of major forces coming together to create an unprecedented demand for executive talent around the world. Organisations concerned to seek out the best talent now recognize that the worldwide shortage created by demographic changes, the expansion of emerging markets, such as India, China and Russia, and changes in attitude and motivation of executives are all contributing to a ‘perfect wave’ of demand. To compete for the best talent they recognize the need for retained executive search consultants to represent them in the market. These are heady days for the executive search profession.”
Regional Trends
Consistent with previous quarterly and annual market share trends; North America represented 42.2% of the global retained executive search market in Q2 2007, Europe 34.6%, Asia/Pacific 16.1% and Central/South America 7.1%.
Q2 2007 saw no quarterly change in the total number of searches started worldwide. However, both North America and Europe experienced a quarterly decline in searches of 3.1% in Q2 2007 (both regions having experienced significant quarterly increases of plus 15% the previous quarter). Enjoying an increase in searches from Q1 2007 to Q2 2007 were Asia/Pacific and Central/South America, up 8.1% and 5.1% respectively.
Year-on-year comparisons also saw Asia/Pacific experience an increase of 15% in the number of searches started from Q2 2006 to Q2 2007, while the ‘Other Europe’ category (European countries excluding the UK, France and Germany) saw an increase of 10%. Peter Felix further commented: “The sustained increase in the number of searches in Asia/Pacific and ‘Other Europe’ which includes Central and Eastern Europe, is testament to the awakening of the emerging economies as they respond to the need for professional management and leadership in private enterprise initiatives.”
European searches experienced an annual rise of 7%, as compared to the same period the previous year. In Q2 2007 the UK held the greatest share of European searches with 28% of the total market. Germany followed with 13% while France maintained 11% of the European market share. France witnessed a 19% year-on-year increase in the number of searches started. The number of searches in the UK and Germany, as compared to Q2 2006, remained steady.
Industry Trends
Q2 2007 revealed a market breakdown by industry consistent with previous quarterly results, with the Financial sector maintaining the largest share at 25.1%. The Industrial sector followed with 23%, Consumer Products (16.4%), Technology (13.6%), Life Sciences/Healthcare (12.4%), Non-Profit (4.3%), and Professional Services (4%) round out the industry breakdown.
Two industries experienced a quarterly decline in the number of searches in Q2 2007, these were; Technology, down 13.8% and Consumer, dropping 6.6%. All remaining industries witnessed a quarterly rise, the largest being Non-Profit, up 6.8%, followed by Industrial (+3.6%), Life Sciences/Healthcare (+2.6%), Financial (+2.5%) and Professional Services (+1.4%).
The data was collected from a sample of AESC member search firms representing the activity of over 1,200 executive search consultants in 42 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.