March 21, 2017 – For boutique search firms, these are auspicious days. Double digit growth and expansion is the order of the day for many of the more specialized recruiters. As a group, industry statistics show, the boutiques are far outpacing their Big Five competition.
Without question, these upstarts are doing something right. Many are now offering accessory services, and outplaying larger rivals at their own game. And many are now taking another page from the large firms’ playbook: looking to merger and acquisition activity to grow their businesses and further extend their offerings.
Craig Buffkin, for his part, gives the bulk of the credit for this growing trend to the leaders of the companies that the search industry serves. Clients have become more savvy, he says, and bring higher expectations than ever before.
Opportunity for Boutiques
“I believe it comes down to the sophistication of clients and their improved understanding of our industry,” says Craig, who spoke with me recently, not long after his own Buffkin Group and long-time higher education specialist Baker and Associates completed their merger. “As retained search has evolved, so has the client experience. The result has been a greater need for specialization both within the larger firms and among the boutiques. This has created an opportunity for firms like ours that can truly deliver specialized value.”
Mr. Buffkin, managing partner of the Nashville-based enterprise, Buffkin/Baker, says it is still early, and the largest firms remain formidable. But if the boutiques make smart choices, their gains in the coming years could be substantial. “This trend will continue, but it will have to play out,” he says. “Make no mistake, the larger players in our industry are large for a reason: they provide great service and solutions to their clients and will continue to do so. But our industry and our solutions are now evolving – and therein lies the opportunity for the boutiques.”
One such opportunity for the Buffkin Group was the recent merger. Craig and his colleagues got to know Baker and Associates upon joining Panorama, a global search network. The Buffkin Group has always been on the lookout for firms that shared its culture and values, Craig says. And after several years of getting to know one another, it became apparent that the two firms would make an ideal match. The Buffkin Group, among other things, brought a venerable healthcare practice that tied in well with Baker’s higher education focus.
“That has definitely played out post-merger,” says Craig “We saw tremendous synergies between the firms. We have an active practice working with academic medical centers and Baker is one of the premier higher education firms in the country. In most cases, the university and medical centers share the same HR team, and that created opportunities for us as a combined entity to serve clients at both the academic and medical center parts of the university.”
Last fall, Buffkin Group opened an office in Chicago and expanded its digital search practice. And though Craig expects the firm to continue broadening its sector reach, he believes it’s even more important to strategically add partners that can deepen the sectors the firm already serves.
“We have always ascribed to the philosophy, ‘an inch wide and mile deep,’ meaning that we want to develop a depth of expertise in areas so that we can offer more to our clients,” he says. “We will continue expanding the firm with this philosophy in mind, but there is no particular timing for this type of activity. We are simply looking for partners who are the right fit for our firm.”
Craig’s background includes a number of years of owning a turnaround practice. That experience has served him well in his current role. “Part of my strategy at that time was to bring in several key executives to lead the company as I transitioned out,” he remembers. “I had an opportunity to do that several times over a five-year period and each resulted in a successful transition. I learned a great deal from that experience and I still lean on that experience as we grow the firm and our client base.”
The search industry is undergoing a dramatic shift, and boutiques are at the center of it. As smaller firms continue to make their mark and win clients that traditionally would have gone to the bigger firms, Craig emphasizes the need to keep the clients foremost in mind. “This industry has not changed considerably over the last 50 years and with the onslaught of technology and its impact on the talent sector we need to all be looking for ways to evolve broader solutions for our clients,” he says. “After all, we are leadership consultants. The shift simply is a better reflection of the value we bring to clients.”
As such, he says, his firm will continue to evaluate additional service lines that can provide a richer, more meaningful solution for our clients. “We are, in fact, in the due diligence stage of that strategy currently. And of course there’s our most recent acquisition of MusicRowSearch, which puts us squarely in the entertainment field. This will open the door to exciting new horizons” for all concerned.
Contributed by Christopher W. Hunt, Publisher and Stephen Sawicki, Managing Editor — Hunt Scanlon Media