June 10, 2014 – For the third year in a row the top recruiting firms in the U.S./Americas region posted a nine percent growth rate, accounting for the bulk of the worldwide talent acquisition market. So flush is business in the U.S., this year’s Hunt Scanlon Media ranking was expanded from 25 to 40 search firms. “We benefited heavily from the surge in the U.S. economy beginning last January (2013) and that accelerated from July onward,” said Clarke Murphy, CEO of Russell Reynolds Associates. Finding talent for its expanding roster of global energy and private equity clients, and making an investment three years ago in the explosive business of hunting down digital leaders for clients, was “pivotal to our success,” he added.
But finding talent is not getting easier for recruiters. Talent acquisition clients are demanding more, in shorter time frames, in an increasingly expansive – and competitive – universe. “This business has never been tougher to execute,” said Mr. Murphy; nearly all of his recruiting chief executive rivals acknowledged the same. “Given increased competition from a variety of sources,” said ON Search Partners’ co-founder Tim Conti, “executive search firms must justify their existence through search results that cannot be duplicated by social media sources or internal recruiting teams.” Like other professional service providers, he added, “recruiters must continue to strive for improved efficiency as competition heats up.” ON Search, specializing in cutting edge sectors like energy and clean tech – and a new addition to the “Top 40” – grew 28 percent last year by recruiting primarily for positions that were newly created (versus replacement searches), indicating that clients are investing in their businesses.
John Marshall, CEO and founder of private equity recruiting specialist JM Search, said that most of the industry disruption he sees is occurring for search assignments below the C-level. But he does agree with Tim Conti that as access to information, and talent, is democratized through sources like LinkedIn, the importance of recruiting expertise is emphasized more. “Companies are more likely to engage search firms for key roles and difficult searches for positions they need to fill ASAP,” he said. “I think the industry realignments benefit smaller search firms and pose threats to the larger firms that have traditionally relied on their network and junior search consultants to execute assignments.” This might explain why the larger recruiting outfits are moving toward offering tangential talent and leadership services beyond search.
If you’re Korn Ferry, that might not be a bad strategy. The firm grew enormously in the U.S./Americas region in 2013; revenues were up 22 percent after a previous year in which the firm hardly grew at all. Cultural dexterity is the new skill set Korn Ferry’s CEO, Gary Burnison, said his recruiters seek more often now in senior level job candidates. “It’s no more about finding that person, but finding out who that person is.” To do this, Korn Ferry can unleash all sorts of talent management services on its clients – who seem to be responding by delivering their business on the doorstep of the nation’s No. 1 recruiter.
The Top 40 firms enjoyed, collectively, nearly $2.3 billion in executive recruiting and related services fees in 2013. With few exceptions nearly every firm reported positive gains; 35 percent reported double digit increases and 10 firms reported growth rates of 20 percent or more. All in all, it’s been a spectacular run for recruiters in recent memory.