Prosperity Found Among Recruiting Boutiques That Merge

As the economy nears full employment, the labor market is tightening -- and that is giving lift to search firms well-poised for growth.

March 10, 2017 – One look at this year’s recruiting industry statistics reveals one clear trend line: double digit growth and expansion is taking place among the sector’s boutique specialists. As a group, they are far outpacing their Big Five rivals. Many have accomplished this by taking a page out of the big firms’ playbook, extending their brands into everything from assessment to coaching to onboarding and off-boarding.

For others, building more capacity has come about in a number of different ways. Some have chosen to stay focused on their core business, recruiting, and to grow that platform organically by focusing on just one or two specialty areas. Another contingent, more bold and audacious, has taken the M&A route – in many cases, with great success.

Just last month, two specialists, The Buffkin Group and long-time higher education specialist Baker and Associates, joined forces. Now known as Buffkin/Baker, the newly-merged creation boasts offices in Nashville, its headquarters, as well as Chicago, New York, Winston-Salem, Charleston and Washington, D.C. Aside from giving it more bulk geographically, the combination has given the resulting business broadened synergies to search for leaders across a number of disciplines, including  healthcare, technology, private club, digital media, digital marketing, financial services, academia and non-profit.

Managing partner, Craig Buffkin, sat down with Hunt Scanlon Media this week to discuss the merger and its advantages. He talks about his background as a turnaround specialist prior to entering the recruiting field – and how that experience is helping him work through his current expansion strategy. He then turns to the dramatic shift taking place across the talent management sector, how clients have evolved, why boutiques are winning more C-suite work, and why there will always be a place for large firm rivals.

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Craig, you recently merged with Baker and Associates, a higher education search specialist. What led to that decision?

We originally met Baker and Associates when we joined Panorama, a global search network. We have always looked for firms that shared our values and culture. It became apparent over a several year period that Baker and Associates and The Buffkin Group were culturally a great fit. That has definitely played out post-merger. 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 you opened an office in Chicago and expanded your digital search practice. Was this a move to broaden your reach nationally and functionally?

Yes, we will continue to broaden our sector reach, but more importantly we will continue to deepen the sectors that we are currently in by strategically adding additional partners. 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. 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.

“This industry has not changed considerably over the past 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.”

Your background as a turnaround specialist prior to entering the recruiting sector must be benefiting you greatly right now.

I did have a turnaround practice for several years. Part of my strategy at that time was to bring in several key executives to lead the company as I transitioned out. 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 experiencing a dramatic shift. In your view, Craig, what’s driving the change?

I think the shift is wise. This industry has not changed considerably over the past 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. After all, we are leadership consultants. The shift to which you refer simply is a better reflection of the value we bring to clients. As such, our 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 you’ve reported on our most recent acquisition of MusicRowSearch which puts us squarely in the entertainment field. This will open the door to exciting new horizons for both our firms.

Boutiques, Craig, are increasingly winning a greater number of senior level and C-suite assignments. What’s playing into that right now?

Your assessment that boutique firms are competing more successfully against the larger firms at the executive level is spot on. As for the reasons, I believe it comes down to the sophistication of clients and their improved understanding of our industry. 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. This trend will continue, but it will have to play out. Make no mistake, however, 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.

Contributed by Christopher W. Hunt, Publisher and Scott A. Scanlon, Editor-in-Chief — Hunt Scanlon Media

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