December 23, 2020 – What a crazy year for executive recruiters! Search consultants were busy but conducting their search work in novel new ways due to the COVID-19 pandemic. Like we do every year, Hunt Scanlon Media took on the challenge of selecting the top 10 stories that shaped the recruiting landscape. Our editorial and social media teams now look back at a year that could change the recruiting landscape forever.
For Hunt Scanlon, 2020 brought new ways to leverage our extensive information and knowledge base to help bring together those recruitment and talent solution firms who are seeking mergers, acquisitions, or funding connections. As the industry transforms itself in the wake of the pandemic, our business has changed with it, meeting new needs as they arise. Still, editorial, content creation, social media marketing, and designing and implementing powerful brand management strategies for nearly 550 clients remains our core. We have an amazing and truly dedicated team based at our home base in Greenwich, Conn and in Colorado, Ohio and New York.
As the year began, most search firms were expecting to build on the tremendous growth of 2019. Then the pandemic hit. Among the array of stories we brought to our readers that gauged the impact of the crisis, one of the more insightful was the one conducted by recruitment software developer Thrive, which delivered both the sobering news of the devastation that the coronavirus had brought and hope for the recovery. We also interviewed search firm leaders about their response to the election of a new President, Joseph R. Biden Jr. Also making news this year, of course, was the national reckoning with race that exploded across the country with the death of George Floyd. We brought you Korn Ferry’s illuminating study on how racial concerns have led many promising minorities to go their own way rather than stay in what many consider an unwelcoming corporate world.
Private equity, meanwhile, continued to make its mark on the search industry. Last month, when New State Capital Partners took an equity stake in search firm Klein Hersh, which specializes in the life sciences and healthcare, one of the hottest sectors, the recruitment industry, and our editors, took notice. We also brought you our coverage of search firm Wilton & Bain’s incisive study on how the pandemic has affected the private equity industry in the U.K. And our story about FMG Leading’s assessment of the key qualities that PE firms look for in their portfolio CEOs enlightened many readers as well.
Hunt Scanlon Media has long been a valued source of tips and insights for those looking to work with search firms. This year, with the pandemic in full force, that sort of guidance proved indispensable. We shared BridgeStreet Partners’ advice for networking with executive recruiters in these days of the coronavirus, CIO Partners’ president Joe Gross’ reflections on recruiting a senior leader during the crisis, and Odgers Berndtson’s 10 questions to help determine if you’ve chosen the right recruitment firm for your needs.
No one can deny the hardships that came with 2020. It has been a tough year all around. But we have also witnessed an encouraging sense of unity in the search industry and an indefatigable optimism. “From now on,” goes one beloved Christmas song, “all our troubles will be miles away.” To that sentiment, we hope you will join us in raising our glasses come New Year’s Eve. Thank you all for your loyalty and trust! Here’s to 2021!
Make no mistake, these have been sobering days for executive recruiting firms around the globe. Most of them, regardless of size, location, or specialization were caught flat-footed by one of the most sweeping economic crises to ever hit the sector. As a result, the nation’s top search consultants have been resetting expectations throughout 2020 – and, in the process, setting a new course as 2021 looms.
Professional services firms – and executive recruiting outfits in particular – have a long history of finding their way through tough times. The COVID-19 pandemic is no exception. Many search firms have used this time to dust off their own continuity and succession plans, or to reconsider that merger or acquisition which was something of a nuisance when times were flush. Others have taken a hard look at their capitalization strategies. This crisis, like no other, has driven many of the most well-known and respected brands in the recruiting business to reassess everything about their businesses, top to bottom.
So it is that Hunt Scanlon Media’s offering of a new set of solutions to assist recruiting and talent solutions providers seeking mergers, acquisitions, or funding connections comes at an especially auspicious time. Armed with a decades-long foundation of market intelligence, insight, and analysis – as well as a long history of fostering connections – Hunt Scanlon now sits at the nexus of buyer, seller, private equity firm or investment bank, and client.
New State Capital Partners, based in Larchmont, NY, has taken an equity investment stake in Horsham, PA-based Klein Hersh International, an executive search firm focused on the life sciences and healthcare industries. “It’s no secret that life sciences and healthcare are booming fields with significant growth pathways for the foreseeable future,” said Shaun Vasavada, vice president at New State. “Businesses in those sectors need experienced leaders with technical expertise to build successful organizations, and Klein Hersh has proven to be a strategic partner to clients seeking world-class talent.”
The pandemic has wreaked havoc on many executive search firms, according to industry market intelligence reports from Hunt Scanlon Media, based in Greenwich, Conn. “But one bright spot has been life sciences,” said the firm in a statement. According to the latest data published by Hunt Scanlon, Klein Hersh reported a 30 percent growth rate last year, with $52 million in revenue among 37 consultants based in one office. Klein Hersh ranked No. 12 among the 50 largest recruiters on the Hunt Scanlon roster of leading firms.
The public outcry that started when George Floyd died under police custody this spring may have jolted corporate leaders into admitting how widespread racism at companies remains. But while CEOs were putting out statements and hiring more chief diversity officers, experts say any real change faces a simple but critical hurdle: convincing top black executives to stay onboard. Indeed, according to a new report by Korn Ferry, too many have looked at their opportunities, seen racism and decided to opt out of the corporate world for more solo opportunities.
“A lot of black talent doesn’t feel valued by corporate America, so they are saying, ‘Screw them, I’m better off on my own,’” said JT Saunders, a senior consultant with Korn Ferry’s diversity and inclusion practice. “It’s a trend that has to stop.” Korn Ferry said that won’t be easy, given the lack of progress firms have with diversity. At current count, only four black CEOs lead Fortune 500 firms, and as of 2019, fewer than 10 percent of the most senior P&L leaders in the Fortune 500 were black.
Like industries across the country, and the world, executive search was devastated by the initial impact of the COVID-19 crisis. But a report on the industry by recruitment software developer Thrive suggests that recovery may be closer than many people expect. Early on in the crisis, one Thrive survey revealed that nearly 80 percent of executive search leaders said they anticipated no growth for the remainder of the year. By the end of the first quarter, Thrive’s executive search data validated that outlook: In the last week of March, canceled and held searches increased by a breathtaking 766 percent and 340 percent, respectively.
“However, as we examine data from the second quarter, it seems that recovery could be closer than we think,” said Reed Flesher, co-founder and head of product of Thrive, which develops software for recruiters and talent executives. “Opened searches — the most important financial indicator for executive search — surged in June and completed searches could soon follow suit. Many industry leaders we’ve spoken to say the search cycle seems to be moving more efficiently, despite unprecedented working conditions.”
How do you size up an executive search firm’s true capabilities? In the age of COVID-19 it is an important consideration. To get you started, Odgers Berndtson has offered up 10 questions to help judge if you have the right recruiter on your side or if it’s time to start a search of your own.
For starters, take a hard look at reputation, how unsuccessful candidates have been treated and the depth and breadth of a search firm’s reach. Recruiting experts from Horton International, Ward Howell, The Dahill Group, 4D Executive Search, Kinsley Sarn, Executive Search Partners, Heidrick & Struggles, Morant Executive Search, Miller Black Associates, KEES and PierceGray weigh in!
As invaluable as executive search firms are for companies, they can also make a tremendous difference in the careers of professionals who are in the market for a new job. During COVID-19, what can be more important for an aspiring job changer than tapping into the right recruiter’s network for forethought as well as networking skills? Recruiter Dave Westberry of BridgeStreet Partners offers 10 tips to getting it right.
Others search leaders chime in as well from Bowdoin Group, NPAworldwide, and Frazier Jones. “As we all continue to navigate this environment, below are a few common missteps that have recently crossed my desk in the past few months,” Mr. Westberry said. “These 10 tips are offered in the spirit of helping senior-level executives gain a deeper understanding of how to more effectively network with executive search consultants.”
For the past 20 years, Joe Gross has built and led high performing sales, recruiting and HR teams, attracting top industry talent along the way while focused on delivering a top-notch customer experience. As president of CIO Partners, Mr. Gross leads the practice development organization and the strategic implementation and execution of recruitment best practices for the firm’s client partners. Previously, he served as COO for the firm while managing, improving, and scaling all company operations.
The costs of hiring the wrong person is always high, but during a pandemic any wrong moves can be costly. That means every organization has had to refocus on how it selects search firms to help make critical hires. Mr. Gross sat down with Hunt Scanlon Media earlier this week to discuss what to ask a search firm when trying to find the right partner for your company to recruit its next senior executive.
Private equity firms conduct rigorous due diligence in assessing acquisition targets. Those with the best track records place high trust in their ability to size up a prospect’s financials, operations and market position. But many mid-sized PE firms are less successful in choosing the CEOs who run their portfolio companies. One study of PE firms, in fact, found a little less than half had to change the CEOs who ran their portfolio companies.
How does this happen? According to a revealing report by FMG Leading, a business and human capital advisory firm, “Investors can overlook three leadership skills that are crucial to rapid, profitable growth: thinking strategically and systemically; building alignment and commitment to the firm’s strategy; and developing essential team members.”
Much of the talk among U.K.-based PE investors in recent years has concerned the Brexit related risks of potential investments, the sky-high valuations being sought by vendors, and the highly fertile fundraising environment which has led to record levels of dry powder and the most competitive capital deployment market that most can recall. According to a new report by Wilton & Bain, 2020 has brought an altogether different set of challenges for obvious reasons.
“It has been interesting to observe the general mood among investors throughout, and to notice on a more situational basis how individual portfolio companies have coped, struggled or even thrived in some instances,” said David Marsh, private equity and financial officers practice lead at Wilton & Bain. “Most funds, partly by design, have a natural level of diversification within their portfolio which produces a range of outcomes in times such as these, and a net effect less severe than might be expected.”
The election of Joseph R. Biden Jr. to the Presidency promises significant change in Washington, D.C. for the next four years. Many questions remain about whether the incoming administration will be able to achieve its agenda, for better or worse, depending on one’s outlook – and the results of two Senate races still to be called in Georgia on January 5. What seems clear, however, is that the executive branch will take a calmer, more predictable approach to governing and leadership. For the business world, and as a result executive search, that’s good news; less turmoil and more certainty are always welcome.
Hunt Scanlon Media recently turned to executive search leaders from around the country to share their thoughts on what impact they thought the new President and his team will have on a range of topics, including the economy, the search industry, unemployment and hiring, climate change & sustainability, diversity, healthcare and global relations. Leaders from Cornerstone International, Comhar Partners, IESF, Rigsby Search Group, Hanold Associates, Horton International, WittKieffer, ZRG, Klein Hersh, N2Growth, Cornerstone Search, Hobbs & Towne and Helbling & Associates share their views . . . and forecasts!
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Erik Boender, Senior Research Editor – Hunt Scanlon Media