Executive Search Faces Shrinking Demand
December 17, 2025 – As a search firm owner, you’ve likely had the call by now. “A larger firm reaches out with interest in acquiring your boutique,” said James Abruzzo, managing partner of JGA Partners. “You take the meeting, curious. They make an offer—lower than you expected, maybe far lower. You politely decline, but the seed is planted.”
You wonder, did I miss the boat? “You hear that other firm owners have had the same conversation,” Mr. Abruzzo explained. “Some accepted. Some held out. A few are already planning their next chapter.”
A slow and quiet transformation in retained search has now become impossible to ignore: boutique firms are merging, the major players are expanding aggressively, and many owners are quietly calculating their next move, according to Mr. Abruzzo. The reason? Search consultants continued to say that the retained search market is shrinking.
The Retained Search Pie Is Shrinking
Let’s be clear, retained executive search is not dying—but it is evolving rapidly, and not in a direction that favors the status quo, Mr. Abruzzo notes. He pointed to several trends are reshaping the landscape:
- Corporate talent acquisition teams are handling more senior roles in-house, the results are mixed, but the cost savings feels lower to them (initially).
- These internal teams are now handling grinding work and research that search firms did in house; using the AI-driven research, sourcing tools and the like. That work and time saving was one point that search firms once considered their edge and value add—and charged a premium for.
- When companies do turn to search firms, they’re demanding more. It’s no longer enough to produce a candidate slate. They want leadership consulting, onboarding strategy, DEI advisory, and deep market knowledge, fast.
- Generalists are increasingly being edged out. Clients are paying for specialization, not breadth. They want a partner that can answer, “how many CFO searches for $100 million PE backed industrial companies that focus on excavation across the broader western hemisphere have you done in the past 12 months…”. The largest number gets the search.
“In short, clients want more value for less money, and they want it from firms that can prove, not just promise, expertise and rep-list,” Mr. Abruzzo said.
James Abruzzo is a career international executive recruitment and talent acquisition professional with expertise across all aspects of the executive search industry and talent function. He has worked with executive search and recruitment professionals from each of the world’s top 10 executive search firms, regional recruitment professionals, independent entrepreneurs and franchise owners.
“With tighter budgets, rising client expectations, and shrinking margins, many firms are reaching the same conclusion: it’s time to do something or be left behind,” he said. “Smaller firms with overlapping specialties are combining forces, and larger firms are buying vertical expertise to meet client demand.”
The No-So Quiet Shuffle Toward the Exit
Mr. Abruzzo also pointed to the Hunt Scanlon Ventures’ Search Firm Valuation Conference, where he said that the mood was reflective—even anxious. The room was packed with firm owners, many with decades of experience, asking themselves the same three questions:
- What is my firm actually worth?
- Can I afford to exit?
- What’s the smartest next move?
“For some, the answer is to sell, even at a discount,” Mr. Abruzzo said. “For others, it’s about succession: convincing their team to buy them out slowly over time. A few will go the M&A route, joining forces with a like-minded firm and committing to another three to five years of building something bigger. And then there are those still hoping for that one last growth sprint that pushes them into a valuation they feel good about.”
So Where Do You Go From Here?
You have a choice and none of them are easy, according to Mr. Abruzzo. “You can bite the bullet and take a lower-than-expected offer for your firm,” he said. “You can try to structure a buyout from your junior partners and gradually step away. You can merge with a synergistic firm and stay in the game longer to grow together. You can go big—really big—and scale fast enough to command a premium valuation. Or, you can power down the website, tell your long-time clients you’ve retired, and quietly call it a day. Every option is valid. But doing nothing will likely be the most gut-wrenching path.”
JGA Partners provides search and services for the executive search industry and corporate talent acquisition function. The firm’s clients include the executive search firms, international executive recruitment membership federations and associations, and leadership advisory and management consulting firms.
Related: AI Won’t Replace Retained Search; It Will Reveal Who’s Doing It Well
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
