Q3 2006 State of the Industry Report

Worldwide Executive Search Revenues Up 18.4%

AESC Predicts Industry Revenues to Climb Resulting in Solid Year-end Figures for 2006

Year-over-year comparisons show that executive search industry revenues rose a record 18% from Q3 2005 to Q3 2006 according to the latest quarterly Association of Executive Search Consultants (AESC) State of the Executive Search Industry Report.

Despite the near-record year-over-year increase in overall revenue, this analysis also revealed a decrease in number of searches started, 7% from Q2 to Q3 2006 according to the latest AESC study. Commenting on the latest figures, AESC President Peter Felix noted, "The industry continues to be on pace for record growth. The cyclical nature of this industry has historically shown a slowdown of searches started from Q2 to Q3 - indicating a degree of quarter on quarter softness during the summer months. In spite of this, we still expect the retained executive search industry to see total global revenues to increase by over 16% by year's end. "

Felix further commented, "AESC member firm consultants worldwide are talking about the ever increasing challenge of recruiting top talent for clients due to incessant demand in most major economies and a scarcity of top grade executives. We are experiencing a replay in some industries of the headiest days of the dot com boom and we fully expect 2006 to exceed the previous industry highs of 2000 and 2001."

Year-over-year comparisons by region show that North America experienced the smallest increase in number of searches started, 3.8% from Q3 2005 to Q3 2006. Remaining regions reported in this analysis, including Europe, Asia-Pacific and Central/South America, all saw much larger increases (11.8%, 19.6% and 21.9% respectively). A quarterly comparison shows that from Q2 2006 to Q3 2006, North America experienced a decrease of 10.4% in the number of searches started, and European firms witnessed a 7.6% drop. Asia-Pacific revealed a small increase of 2.4%, in comparison to a previous quarterly increase of 18.9%. The number of searches started in Central/South America fell by 1.7% from Q2 2006 to Q3 2006.

Industry Trends

A year-over-year comparison by industry reveals that Technology decreased 7.5% from Q3 2005 to Q3 2006, Financial Services increased by 16.8%, as did Life Sciences/Healthcare (+10.8%) and Non-Profit (+23.8%).

All reported industries experienced a quarterly decrease in searches started, with the exception of the Industrial sector (+0.5%) and Professional Services, which revealed a quarterly increase of 28.4%; a sharp rise in comparison to the previous quarterly increase of only 0.4%. The industries with the largest quarterly decrease in searches during Q3 2006 were Technology (-14.5%), Financial (-11.4%) and Non-Profit (-16.6%).

Consistent with previous quarters, the Financial sector captured the largest share of number of searches with 25.1% of the total market, as compared to all other reported industries. The Industrial sector followed with the second largest share, 22.7%. Consumer Products (16.9%), Technology (14.4%), Life Sciences/Healthcare (12.3%), Non-Profit (4.1%) and Professional Services (3%) round out the industry breakdown.

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.

Read the full report.


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