Executive Recruiters Look to Diversification and Human Capital Tailwinds for Growth

April 10, 2024 – Executive Recruiters Look to Diversification and Human Capital Tailwinds for Growth

Hunt Scanlon Media has released its annual productivity report of leading executive recruiters globally, billions of dollars poured into the high-end recruiting sector in 2023, but at a slower rate than in previous years.

Executive recruiters pulled through a challenging year in 2023. Market turbulence and a soft economy impacted most search firms with the sector declining 12.2 percent. Hardest hit were recruiters serving the tech stack, VC, and high growth companies. Nevertheless, the Top 50 generated $6 billion in fees last year.

70 percent of U.S. recruiting firms on the Hunt Scanlon Media Top 50 ranking reported negative growth, but there were exceptions: No. 22 Modern Executive Solutions earned the distinction as the fastest growing search firm of 2023, rising 40 percent. No. 7 ZRG Partners, which moved up two spots on the rankings, was up 31 percent driven by programmatic M&A, giving it the distinction as the fastest growing search firm among the Top 20.

Other notable gains were recorded by Academic Search, which had a 32 percent gain in revenues, Bay Street Advisors, which posted a 31.4 percent revenue increase, and, which had a 16.4 percent gain.

Focused on finding marketing leaders for tech startups, RevelOne took a hit in 2023 when fundraising was particularly difficult for early-stage tech companies, and marketing spend decreased.

Nevertheless, the firm still found significant search work, including placements for StackBlitz and EMAPTA.

Similarly, SPMB, whose primary clients are technology and cybersecurity startups and private companies – sectors that took a hit in 2023 – fell 28 percent in 2023. Nevertheless, the firm completed significant search work Google Chrome, Wrapbook, Prodigy.

While True scaled rapidly and was Hunt Scanlon’s fastest growing firm of 2021, their growth outpaced demand when clients hit the hiring brakes in 2023.

Hanold Associates, focused on placing top HR professionals at public companies and PE-backed concerns, reported a 21 percent decrease in revenue in 2023. As the macroeconomic climate remained uncertain during the year, it became that many organizations paused searches for CHROs and people-focused roles.

There were still some bright spots and areas of growth for the industry in 2023. Academic Search grew 32 percent and placed academic leaders across the higher ed space, including the president of Associated Colleges of the Midwest and the dean of the College of Education & Human Development for University of North Dakota. Academic Search also provided executive coaching and onboarding to clients in need of that service. In the mission-driven sector, Isaacson, Miller similarly found growth in a tough recruiting year and grew 3.7 percent.

At Bryant Group, DEI has continued to be a strategic growth area, and last year was no exception for the firm. “Over the past five years, women and diverse candidates have made up 74.6 percent of our placements,” said president and CEO Sally Bryant. In fact, the placement of diverse candidates (without including white women) stands at just under 40 percent at the firm. And according to Ms. Bryant, candidates at the leadership level stay with their client organization an average of seven-plus.

More Turning to M&A

While headwinds hit many across the executive recruiting sector in 2023, stronger tailwinds in the human capital management (HCM) sector stand to benefit the search industry and will drive growth and M&A activity moving forward. But search remains a highly cyclical and fragmented market and for that reason M&A will continue to be a crucial lever for industry leaders seeking sustained levels of outperformance over the next decade.

Powering the consolidation trend are the acquisition targets themselves. In a recent Hunt Scanlon poll 51 percent of search firms are planning to explore M&A solutions over the next 24 months.

An equally important lever tied to M&A is diversification, according to search industry leaders. Private equity firms, which have shown keen interest in high-end recruiting platforms in recent years, and strategic buyers have all shown an increased appetite in buying and building new HCM platform verticals.

That uptick in interest and activity is centered around a number of HCM solutions, including interim and on-demand talent, leadership assessment, executive coaching, leadership consulting and culture. These offerings, with more stable and recurring revenue streams, will give the recruiting industry more resiliency to macroeconomic headwinds.


While executive search isn’t new, companies are starting to realize how crucial talent remains in helping their organizations flourish. There has been an evolution throughout the human capital space shifting search firms beyond simply placing an executive towards a more holistic value proposition. This evolution towards building more holistic talent platforms with a diversification of offerings proved to be a novel way for certain firms to navigate the softer market in 2023.

One firm that deliberately focused its attention on this strategy is Korn Ferry, the industry’s behemoth organizational consulting firm. The firm has expanded in recent years to go far beyond its roots in hiring people for its massive client base. It now advises on how to reward and motivate the workforce it recruits, while developing professional level talent as they navigate and advance their careers.

Korn Ferry’s diversification strategy has paid big dividends. The firm raked in $1.78 billion in fees across its Americas region last year, and another $1.02 billion overseas. As a group, the world’s five largest providers, colloquially known as the SHREK firms, took in $6.7 billion in fees in 2023. Korn Ferry has ranked No. 1 for decades.

“We’ve diversified our offerings because we want to say yes to more clients when they have a need.”

Last year, Korn Ferry strengthened its capabilities in the interim and transition management business with its acquisition of Patina Solutions Group. It also acquired Salo LLC, a provider of finance, accounting, and HR interim talent. This comes on the heels of Heidrick & Struggles’ blockbuster move into the interim and on-demand talent space in 2021 with its acquisition of Business Talent Group.


Russell Reynolds Associates, which catapulted two places on Hunt Scanlon’s Big 5 rankings to reach No. 2, has also turned its attention to M&A, using this strategy to reinforce its capabilities. Last year, in fact, marked an M&A inflection point of sorts for the organization. It acquired coaching, leadership integration and team development firms Nvolv in June and Kilberry in August, followed by Savage Partners in November, a particularly noteworthy acquisition which deepened the firm’s solutions for growth-oriented technology companies.

Turning to aligned talent offerings has not been relegated to just the biggest providers, however. ZRG Partners clocked in as the fastest growing search firm on Hunt Scanlon’s Top 20 rankings, and for good reason: programmatic M&A.

“We have been in on almost all of these trends for the last several years,” said CEO Larry Hartmann. “When we started, we were a single line, retained executive search firm. We now have four business lines (search, interim, consulting, RPO) handling talent needs for our clients across the world. We’ve diversified our offerings because we want to say yes to more clients when they have a need,” he said. Today, the PE-backed global talent advisory firm employs hundreds with $230 million in worldwide revenue.

A wave of consolidation in executive search and further diversification into aligned HCM markets is expected to fuel M&A activity – and, more importantly, help to accelerate growth – in 2024. That activity is expected to extend well into 2029.

According to industry leaders and outside investors coming into the space, the executive search industry is poised for growth by leveraging strong momentum in the HCM market and focusing
on integrating what is now a highly interconnected human capital matrix that will ultimately provide a highly tiered, strategic approach to talent management.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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