Q3 2014 State of the Industry Report

Third Quarter Executive Search Surge

Heightened executive search activity in Financial Services and North America in Q3 2014

The third quarter of this year saw year-on-year growth within the executive search profession as revenues rose 8.6% from the same period a year ago (Q3 2013 to Q3 2014) and the overall search volume increased by 8.7%, according to data just released by the worldwide Association of Executive Search Consultants (AESC).

The year-on-year surge in third quarter revenues and new search mandates was set against a slight quarter-on-quarter slow down in revenues, down 2.1% from Q2 2014 to Q3 2014, and in the number of new searches started, which fell 2.4% quarterly.

AESC President Peter Felix commented: “Despite a slight decline in global revenues during the last quarter, the year-on-year figures for the worldwide executive search market continue to be very encouraging. They confirm the trend of the past 12 months which indicate a strong US market but more moderate demand in parts of Europe and Asia/Pacific.

“The correlation between economic conditions and executive search demand becomes stronger year by year, reflecting the volatility of corporate decision-making in our increasingly interdependent world. Our hope continues to be that the US economic revival will lead the world out of economic malaise and put a match to the tinder of a crucial executive talent shortage that is smoldering beneath the surface. We continue to be extremely optimistic that executive search and leadership consulting demand will grow substantially in the coming years”.

Yearly and Quarterly Growth for Financial Services

The Q3 2014 industry picture saw the Industrial sector retain the largest global market share in new executive search activity and witness both yearly and quarterly growth (+8.7% and +0.7% respectively).

The Financial Services industry held the second largest executive search market share in Q3 2014 and was the only other industry, next to Industrial, to experience yearly and quarterly growth in new search starts. The Financial Services year-on-year growth was robust at 18.6% from Q3 2013 to Q3 2014 and quarterly growth was 2.6%.

Harry O’Neill, Managing Partner, Hong Kong and head of Financial Services Practice for Asia Pacific and the Middle East at Heidrick & Struggles, said: “In our industry, demand drives the business – whatever anyone says about the war for talent, it is the demand that drives that war, not the supply. Our view is that the demand of the last six months is likely to persist into 2015. We expect to see momentum and movement once the compensation cycle is completed. Areas such as risk and compliance continue to be great areas for demand where there isn’t a level of supply to match it.

“In Asia we see the key demand in asset management. Banking as an industry is still very challenged, whereas asset management looks much more attractive and is much more lightly regulated, for now. It means that the buy side – and in particular those firms that are morphing from a traditional asset management model into alternative financial services organizations – represent a real attraction for people working in investment banking.”

Tim Gibson-Tullberg is Managing Director and global head of the PWM Practice at Sheffield Haworth, based in Singapore. He said: “We’ve noticed an increase in demand due to a slowing of the success of internal recruitment platforms to persuade bankers to only look at their platform. Candidates want to take stock when moving, not just fall into another job.”

Strong Quarter for North America

North America retained the largest worldwide market share in executive search activity (44.4%) and was the only major region surveyed to experience both yearly and quarterly growth in the number of new searches started in the third quarter of this year, rising 11.3% yearly from Q3 2013 to Q3 2014 and up 1.4% quarterly from Q2 2014 to Q3 2014.

EMEA held the second largest worldwide executive search market share (32.4%) and saw a 10.3% year-on-year rise in new search mandates, though the volume of new EMEA searches did decline quarter-on-quarter (-5.9%). Asia Pacific saw a 4% yearly rise in new executive search activity in the third quarter of this year, but a quarter-on-quarter decline – as with EMEA – of 5.9%. The Central and South American region saw a yearly drop of 3.1% in new search mandates and little change quarter to quarter.

The AESC State of the Executive Search Industry Report is quarterly research carried out by the Association of Executive Search Consultants (AESC) since 2004 on trends in the global retained executive search and leadership consulting industry. Data for the report is collected from a consistent sample of AESC member search firms representing the activity of 1,402 executive search consultants in 46 countries worldwide. AESC access to retained executive search data positions this report as a leading indicator of the future worldwide management employment market and a barometer of hiring trends for top-level and seldom advertised positions in key market sectors.

Read the full report.


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