Lockdown restrictions are easing and the weather is improving, but what is the forecast for the executive search market? Here is our analysis of the latest trends that we are seeing as the first quarter of 2021 comes to a close.
Researcher, Associate and Diversification demand
Market confidence has returned in Q1 2021, with a vast proportion of executive search firms showing increased optimism and an appetite to hire.
What a difference 9 months can make and nowhere is this truer than in the researcher and associate market. Between May and December last year, as mandates were pulled or put on hold, many research and associate level staff were furloughed or made redundant to save costs. In 2020, the search market demanded fee earners and originators.
Fast forward to Easter 2021, and there is now a strong need for research and associate level hires to support Principal and Partners. Mandates have been won, fee income is being generated and now is the time for additional support. However, demand has outstripped supply, and we are in the midst of a challenging, short-term recruitment bubble for junior hires that will only alleviate over time. The job market is very different to 12 months ago, and the economic principles of supply and demand mean we have witnessed a notable rise in costs for such hires.
Increased demand has also led to heightened diversification calls. The executive search market has often had a certain stigma, and there is a drive within the industry to ensure that practices can connect to a wider audience as well as associate to the firms they are recruiting for. Boards are now looking ahead 2-3 years to how their internal workforce will be viewed externally, and these hires are often being made at a junior level.
For CEOs and Partners reflecting on 2020, it was a year that highlighted how overly reliant businesses can become on a few individuals generating the bulk of their fees. While diversifying your markets or opening new offices can help (both of which take time), it is important to retain your own staff and source individuals who can make money regardless of what the market throws up in the meantime.
Principal consultants who back themselves and their relationships to build or set up a practice are in demand. Although we are only 4 months into 2021, there have already been some notable senior-level moves and more boutique firms are setting up to capitalise on a fragmented market.
How to engage in a competitive market
At the start of 2021, trying to engage and recruit was difficult. Everyone was busy and those working in executive search were seemingly overloaded with work. For individuals not actively looking, taking calls about opportunities was simply not at the top of their agenda. This mindset is starting to shift, and engagement levels will be higher as summer approaches and lockdown restrictions ease. How you engage and the subtle nuances required to source in a competitive market will be crucial. Connections that resonate on a personal level are key. Speed is also required.
While we anticipate the summer is likely to see a dip in hiring (the sheer volume of holiday allowance people will be owed means many will try and take leave in the summer months), there are still ample reasons to be optimistic.
Mandates continue to come in across most markets, and we have seen the markets of PE, investments, renewables, tech and life sciences really accelerate. Overall, we believe the outlook is bright for activity levels to remain high.