Insights
Q2 2008 State of the Industry Report
Turbulent Times Reinforce Added Value of Senior Leaders - Q2 2008 State of the Industry Report
AESC Q2 data reveals that organizations continue to call on the retained search industry to fill crucial roles
The worldwide retained executive search industry continued to grow in the second quarter of 2008 despite a decline in Financial Services searches, according to data released today by the Association of Executive Search Consultants (AESC).
While the number of executive searches fell worldwide – down 3% annually and 5% quarterly – global revenues grew at a rate of 10% annually and 6% quarterly. Predictably, the decrease in searches was felt by the Financial Services industry, with searches down 16% annually and 7% quarterly. However, counter balancing this decline was an increase in searches within the Industrial sector, experiencing the greatest annual industry rise of 11% and the only industry for searches to increase quarterly - up 5% from Q1 2008.
AESC President, Peter Felix, explained, “The statistics for this quarter reinforce a clear trend, evident during the past year, that while the number of searches being assigned has fallen slightly, the revenue generated by searches has climbed. This has kept the search industry on an even keel during difficult times and has maintained the very strong revenue position of the past several years.
“The causes of this are clearly linked to the shortage of executive talent, especially in key sectors and regions of the world. While the financial services sector has seen yearly and quarterly declines, other sectors have experienced continued growth, the most significant being industrial. Emerging markets continue to show strong demand with countries in Latin America now demonstrating considerable increases in their use of retained executive search.”
In the second quarter of 2008 the average fee per executive search assignment increased 16% year-on-year from Q2 2007, and grew 6% quarterly.
“The value per search has continued to rise since organizations are finding it increasingly difficult to attract the most talented in the market and realistically are paying more for them. Clients recognize that the best talent is worth paying for and that using professional help to secure it is money well spent. In turbulent times such as these the added value of executive search consulting becomes even more apparent”, commented AESC President, Peter Felix.
The AESC state of the industry report confirmed that since Q1 2008 the Industrial sector – with a 26% market share in Q2 2008 – accounted for the largest share of executive searches started, a place previously dominated by Financial Services. Q2 2008 saw Financial Services in second place with a 22% market share, followed by Consumer Products (18%), Technology (15%), Life Sciences/Healthcare (11%), Non-Profit (5%), and Professional Services (3%).
Also enjoying a yearly increase in searches alongside Industrial (+11%), were Technology (+7%), Non-Profit (+6%), and Consumer (+4%). Industries experiencing an annual decline in searches next to Financial Services (-16%), were Life Sciences/Healthcare (-17%), and Professional Services (-23%).
AESC Q2 2008 data revealed that annually, searches had decreased in all regions except Central/South America, which grew 15% from Q2 2007. Searches in North America fell 8% year-on-year, Asia/Pacific remained flat (-0.5%) since Q2 2007, and Europe declined 2% yearly and 8% quarterly.
Regional market share analysis showed that in the second quarter of 2008 North America held 40% of the global market share of executive searches, followed by Europe (35%), Asia/Pacific (17%), and Central/South America (8%). The annual trend saw only minor changes in regional market shares.
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.