January 28, 2021 – John Wallace is CEO of Toronto-based Caldwell. He also serves on the firm’s board of directors. A results and client-focused leader, Mr. Wallace draws on 20 years of executive search experience to drive results based on objective measures, market intelligence, strategic planning initiatives, and clear targets for growth.
Since becoming CEO in 2008, Mr. Wallace has affected a strategic growth plan for the firm that has included launching operations in the United States, Europe, and Asia Pacific, while quadrupling the firm’s annual revenue. Mr. Wallace recently sat down with Hunt Scanlon Media to discuss what he is seeing in the executive search market in Canada and beyond.
John, what are you currently seeing in business across Canada?
As a whole, the Canadian executive search market is on the road to recovery, though – as we usually find ourselves – lagging somewhat behind the U.S. We’re tracking two to three months behind the pace of recovery in the U.S. and are anticipating a very strong recovery through the second and third quarter of this calendar year. As a geography, Western Canada, where the industries are more concentrated in energy, has been slower coming back than Eastern Canada. We have seen a steady uptick in activity across the board since the early summer, and most firms are experiencing similar buoyancy. There was such a gap in supply and demand for leadership talent, and now that the recovery is truly underway, there appears to be a real sense of urgency with clients to engage on searches.
Describe the impact of COVID-19 on your business and on the general business climate in Canada.
COVID-19 had a major impact in Canada, as it did around the world. The spring months brought a dramatic pause to new search activity, but we have seen a steady increase in new business activity since the early summer that has continued through to the new year. Again, I think we’re just going to be a little bit behind the United States in the recovery, but we are in recovery for sure. The other differentiating aspect of the current pandemic for Canada versus the U.S. is that virtually the entire country is in some form of lockdown and outside of California and New York, the U.S. is not. Canada has had fewer reported cases of COVID per capita than the U.S., but by all early appearances, Canada is going to be slower coming out with a vaccination program throughout the course of 2021. COVID-19 has also had a dramatic effect on our operating model, as we seamlessly transitioned to remote search work with great success. Prospective candidates were able to be more responsive, enabling us to connect with a substantially higher percentage of people to discuss our clients’ opportunities, and creating a better outcome. It is vastly easier to align schedules for a Zoom than it is for an in-person meeting. It has been an incredible exercise in flexibility and problem solving, and our team has done just a phenomenal job pivoting to a new process to execute searches.
When do you expect recovery to occur?
The recovery is already underway now and we expect it to pick up further as the year progresses. In conferring with other professionals (compensation consultants, PE investors, consultants, etc.) the general consensus is that there will be lots of movement (and thus strong search demand) for the next 12 to 18 months at minimum. As the recovery continues to gain momentum in Canada, clients will get back to investing in talent versus just filling key roles. There is great need for new talent in organizations to help with needed transformations where they have lagged. We are also anticipating significant leadership transition to come, especially at the CEO level. There are a good number of tired executives coming out of this pandemic and resultant economic downturn who have been instrumental in transforming their company, making sure the balance sheets are in good shape, protecting the jobs of their people and who will be ready to retire once COVID is under control to the degree they can do so without abandoning ship. We expect that in the second half of the calendar year, Canada will be back running step in step with the United States.
What is fueling the recovery?
It has been fairly, well-balanced across the board. Private equity, software, e-commerce, EdTech, life sciences, consumer financial services, and insurance have shown strong demand. Hospitality, travel, and energy have obviously been hit hard, but those sectors will bounce back strongly once we come out of the pandemic. Roles related to enabling digital and technological transformation within legacy businesses and industries continue to be a key hiring focus and COVID-19 has only accelerated the importance of being a digital-first company. Sky high tech company valuations are an indication of the broad perception that digital is where the future will be. We’ve seen a lot of activity in strategy and corporate development roles, which is always a big sign that things are really moving forward as companies look to grow and invest versus cutting costs. Diversity, equity, and inclusion leaders are also in huge demand.
How will the new U.S. administration affect cross-border search work between Canada and the United States?
Cross-border search work has remained fairly consistent during the pandemic, so we don’t expect much of a change. The U.S. and Canada have always had a good working relationship, and we are confident that it will remain so. Economic cycle aside, what will benefit cross-border work is people’s view on stability of administration, and there’s an administration that is now set for four years and so that stability should benefit both parties.
How important is it for multinational companies to have a partner in the U.S.?
Any company that looks at themselves as multinational, even if they are based in Canada, wants their search team to be looking for talent in the United States as well. Having an established presence in both countries can be a determining factor in winning those searches, so the benefits can be substantial. As the oldest and largest search firm in Canada with a broad and well-established presence in the United States, we have never been in the market for a U.S. partner. Caldwell has a history of forward-thinking strategy – in 2009 when many firms in the recruitment industry contracted, we leveraged our financial strength to establish new sector practices and a significant presence in the U.S. market, more than doubling our revenue-producing potential and sparking a decade of continuous growth. This growth has lately been evidenced not only by our numbers, but by our recent acquisition of IQTalent Partners.
What was behind that decision?
With this merger, we are setting our sights on transforming the world of talent and creating a new category. We believe that IQTP’s unique service model and innovative use of technology, paired with Caldwell’s expertise, network and resources will allow us to serve our clients in a more integrated fashion and allow us to have a greater impact on their long-term success, which remains our primary mandate. We are confident that this is an investment in innovative models and technologies, and that combining our resources, network, and team with the those of IQTalent Partners will drive a new and even more impressive era of growth.