December 23, 2021 – For the recruiting industry, 2021 was dominated by the pandemic and search sector consolidation. Mergers and acquisitions, in fact, made for some of our most highly read news stories. But it was also a year when so many world-class search assignments were handed out — and those mandates were answered with some of the best talent placed into key roles our editors have seen in years. Truly transformative events and innovative change dominated our newswires, rankings and market intelligence reports this year. Recruiters pivoted to working from home and to remote interviewing, and we believe those are permanent shifts. As we do every year, Hunt Scanlon Media took on the challenge of selecting our Top 10 stories that shaped the recruiting landscape.
As always, the executive recruitment industry was enamored with the up-and-coming influencers in 2021 yet paid its respects to those who paved the way for the industry to become what it is today. One executive recruitment firm that drew attention this year was Daversa Partners, whose emerging women leaders are empowering women at their own firm as well as the tech companies they serve. But hearts were also heavy at the passing of industry giant Egon Zehnder, at age 91; he established a gold standard brand synonymous with integrity and discretion.
We also looked at how private equity’s unquenching need for talent across the sector continues unabated, focusing one story on NGS Global’s conversations with 10 PE leaders about how to source and retain the best leaders. For the search industry, the PE sector has been a godsend, providing plenty of new business for both established and new firms; of the latter, our story in September homed in on the launch of Artico, with its focus on cybersecurity, PE and VC.
Another important launch that we covered, with a different focus, was the creation of Jensen Partners’ new software platform, DiversityMetrics, which uses self-reported diversity data and human capital management technology to improve clients’ workforce diversity and inclusion – both within their own organizations and across their portfolios.
One of our better-read stories told of the crisis management dilemma created by the pandemic and how chief financial officers were playing a broadening role. Hunting them down became big business for recruiters in 2021, but, as we shared, the position is changing, and recruiters must have a deeper understanding of their clients’ companies and the CFO’s role and relationships within them, especially with the sudden transition to virtual work. Yet no role emerged more important in 2021 than HR leaders; a Slayton Search Partners report we covered detailed how in the pandemic CHROs were charged with determining how to keep employees safe, as well as take an active part in devising new company processes and high-level business strategies.
In 2021, some of the search industry’s players simply could not be ignored. As our coverage showed, ZRG Partners’ acquisition of Walking the Talk punctuated the rising importance of culture transformation for businesses today; and we followed up that story this summer with an in-depth look at ZRG’s CEO Larry Hartmann and his firm’s emergence as a consistent player in the M&A battle to gain market share. ZRG, however, was hardly the only player on the search industry’s M&A landscape: In May, we focused on LLR Partners’ investment in Haddonfield, NJ-based True, a global executive talent management platform, and the partnership’s aim of developing and expanding innovation within the talent space. That investment just months later led to True’s acquisition of the fastest growing search firm, Hobbs & Towne, the leading climate tech recruitment provider. Hunt Scanlon Ventures was honored to have played its role in both transactions.
Let’s take a look back at the top recruiting stories of 2021!
Executive search firms have made big strides in recent years to reflect the changing make-up of their client base – becoming more progressive, more forward-thinking, and more female-led. Progress has been slow to come. But one headhunting outfit that has been leading the charge in effectively terminating the sector’s once male-dominated worldview is Daversa Partners, a strategic talent partner of choice for founders, venture capital and private equity-backed companies. The search firm’s global workforce today is made up of 64 percent women, and 58 percent across its senior leadership team. According to CEO Paul Daversa, the firm has no plans of retreating. The more revealing story is found among the search firm’s emerging women leaders themselves, who are affecting change across the functional ecosystems they dominate. Reinforcing the firm’s reputation of finding exceptional leaders and teams for their clients, these talent influencers are making inroads that will help empower the women who follow them, both at their firm and the tech industry at large. Three standouts among this group are an ensemble of women – Geri Allyn, Julie Wrapp and Christen Morelli Seiler – all partners at Daversa Partners. Each joined the firm in their early 20s, starting at the ground floor as associates and built their careers, reputations, and networks one search at a time. In about a decade, they have emerged as three of the most influential recruiters in technology serving up leaders to emerging, growth stage companies from the Silicon Valley to Europe. Relentless, fearless, ambitious, and obsessed, they recruit the catalytic talent that is transforming the tech industry while building out the management teams for the most disruptive companies of our generation.
Egon Zehnder, 91, founder of the global executive search firm that bears his name died in Zurich as we entered the closing days of 2021 after a brief illness. Born on April 12, 1930, Dr. Zehnder graduated from Harvard Business School in 1956. In 1964, at the age of 34, he founded his own firm in a townhouse above Zurich. Initially, the company was composed of just himself and Brigitte Jentsch, who served as his assistant for 55 years. “What resulted nearly six decades on is a values-led management advisory firm synonymous with integrity, discretion, and loyalty,” said Scott A. Scanlon, CEO of Hunt Scanlon Media. “This firm is a case study in how strong values can be passed to subsequent generations,” he added. “As you can image, we all gathered virtually when we received the news last week,” said Ed Camara, global chief executive officer of Egon Zehnder. “Apart from the many very personal stories that we have shared among us, one thing particularly strikes me: His legacy is that he didn’t implement values, he lived them with all his heart, with his professional identity and without compromise. That is his true legacy that lives on in our firm that bears his name.”
The global private equity sector is more than three times bigger than it was just 10 years ago. How can PE firms ensure that they are attracting the best talent to lead their portfolio companies? Despite a COVID-induced 22 percent downturn in private equity fundraising and deal volume in 2020, the broader multi-year trend is that the sector is extremely healthy, growing fast, diversifying, and becoming much more competitive, according to a new report by NGS Global. Global capital raising has ballooned in the last decade, growing from $155 billion in 2010 to $503 billion last year. The sector now employs 8.8 million people in the U.S. alone. Within this context, Lee Brantingham and Jonathan Nosal of NGS Global spoke with 10 private equity company founders and executives about their key suggestions for how to source and retain the most talented PE leaders. Their raw insights and perspectives paint a complex and evolving picture.
No one could argue that Mercedes Chatfield-Taylor and Matt Comyns, both of whom recently departed from Caldwell to co-found their own executive search firm, Artico Search, are anything less than ground-breaking search leaders. They are both among the very best in their respective specialties, recruiting some of the most sought after, and costliest, hires in the search industry and building successful practices and teams in their areas of specialty. In joining forces, they are looking to create a powerhouse search brand that reflects their experience, passion, and core values focused on delivering the people to drive change and transformation in the tech industry. Ms. Chatfield-Taylor’s team focuses on executive-level search for scaleup venture capital and private equity-backed technology companies. The team has deep expertise in global enterprise software, data and consumer internet businesses. Mr. Comyns’ clients, meanwhile, include any number of companies that have been affected by serious cyber attacks and are now looking for talent to prevent it from happening again. “The reason I get those searches is that the ninjas who are brought in to fix the breach are recommending me to their clients,” he said. Given the ubiquitous nature of cybersecurity, his clients range from global financial services operations, a crypto currency company, unicorn tech enterprises, a top energy company, a major insurance company, and the list goes on. The greatest growth area over the last two to three years has been with private equity and venture capital-backed organizations, including Blackstone, Vista, and a16z.
When Larry Hartmann, chief executive officer of ZRG, was a youngster, you could find him playing sports with the other kids in his neighborhood. He was an excellent team player by all accounts. But, as one old friend tells it, he also had another youthful passion: the board game Monopoly. And though the leader of one of the fastest growing mid-sized global executive search firms chuckles at the memory, there is no denying the skills he honed buying and selling properties with one-sided, multi-colored currency is now paying big dividends in the real world of deal making. “I was playing basketball, football and doing all those things,” he said. “But in my spare time I did enjoy that game and thinking about strategy.” Mr. Hartmann’s first business, post-Monopoly, started fresh out of college. It was a start-up that he and some colleagues grew to go public and sold to American Express. “I’ve always been an entrepreneur who loves growing things. That’s what excites me – growth and being an underdog and winning. It’s in my DNA – enjoying the game of business and looking at how to compete better,” he said. These days, Mr. Hartmann still has a knack for rolling the dice – and winning. Backed initially by capital partner Northcreek Mezzanine and for the last several years by RFE Investment Partners, Rochelle Park, NJ-based ZRG has achieved sustained double-digit growth through strategic acquisitions, key hires and building out several interconnected and highly synergistic business lines – among them: executive search, interim talent solutions, and culture transformation consulting.
Perhaps the most important lesson that business leaders have learned from the pandemic is the importance of continuity planning in the C-suite, and beyond. In the crosshairs: Chief financial officers who are suddenly dealing with a vast array of new challenges, from cash flow, declining revenues, and employee health, to advising the CEO and board on strategic alternatives. Since COVID-19 struck, CFOs are being asked to play a broadening role. For executive search firms, CFOs continue to be in high demand, and finding these executives is keeping recruiters busier than ever. But the position is changing before our very eyes. That means recruiters must have a deeper understanding of their clients’ companies and the CFO’s role and relationships within them, especially with the sudden transition to virtual work. Being able to create liquidity and guard cash in an emergency are no longer enough for today’s CFO. Financial planning and analysis skills have become more critical. And preventing business disruption now means much more – a new layer of risk on the CFO plate is employee health. “For many years the typical CFO job description has included the notion of partnership with the CEO and very many CFOs have the HR function reporting to them,” said David Hart, managing director of ZRG and co-head of the firm’s financial officers practice. “These two elements of the CFO’s job are changing dramatically and rapidly in today’s world. Helping the CEO and/or the private equity client make better decisions about CFO talent means that we have to bring a more complete understanding of how these changes are effecting the CFO role in our clients.”
2020 brought numerous changes during a landmark year. It began normally in the first quarter, followed by the global pandemic in the second. This immediately ushered in uncertainty, and coupled with social unrest, created one of the most tumultuous times in modern history. In the third quarter, the curve became flatter and the economy reopened, followed by a fourth quarter that brought a fresh surge of COVID, more social unrest, and more uncertainty surrounding the election. A new report by Slayton Search Partners says that these moments combined to thrust human resources into the spotlight. “After all, HR was called upon to lead in the face of the people issues that arose in 2020,” said John Doyle, the report’s author. “Tasked with going beyond traditional departmental responsibilities, CHROs had to interpret a global pandemic to determine how to keep employees safe, connected and mentally strong. More than just providing stability, these leaders took an active part in devising new company processes and high-level business strategies.” The best CHROs emerged as trusted voices during 2020, working shoulder-to-shoulder with CEOs and other executives to navigate the effects of the pandemic. “It’s a fundamental change to the leadership dynamic in so many companies,” said Mr. Doyle. “By all accounts, CHROs are having a moment, one that elevated them last year and will keep them there for the foreseeable future.”
Executive search firm ZRG acquired Walking the Talk, a consulting and advisory firm focused on culture transformation. Hunt Scanlon Ventures facilitated the introduction and transaction between both organizations. Walking the Talk, headquartered in Amsterdam, specializes in enhancing performance results by aligning culture with strategy. Since the company was established 11 years ago, culture has landed firmly on the agenda of most executive teams and boards of directors. As pioneers in this field, understanding the impact culture has on growth, performance, and reputation, Walking the Talk has grown to become the largest consulting firm solely focused on the culture agenda. The firm operates globally and has supported clients on dozens of engagements, which can last anywhere from a few months to a few years. “It used to be that organizations synchronized their leadership to corporate vision, mission, core values, and strategic objectives,” said Scott A. Scanlon, CEO of Greenwich, Conn-based Hunt Scanlon Ventures. “But in the wake of COVID-19, permanent, systemic changes to the workplace have forced a more holistic approach built around culture. This acquisition is a big bet on the coming realignment.”
LLR Partners, a private equity firm based in Philadelphia, has made an investment in Haddonfield, NJ-based True, a global executive talent management platform. The new partnership is aimed at developing and expanding innovation within the talent space. True has consistently been the fastest organic growth mid-sized search firm over the last decade. David Reuter, a partner at LLR, joins True’s board of directors alongside Nick Caldwell, vice president of engineering at Twitter; Jennifer Ceran, CFO of Smartsheet; Alex Shootman, CEO of Adobe company platform Workfront; and Evan Wittenberg, EVP and chief people officer at Ancestry. Following the minority stake investment, True co-founders Brad Stadler and Joe Riggione will continue to lead the firm with support and guidance from its board. True’s valuation was said to have been an outlier, reflecting the private equity firm’s belief that True has the potential to become one of the most significant brands in the executive talent sector. Notably, the deal is structured to grant employee participation in value creation over time.
In 2021, New York City-based Jensen Partners, a woman-owned executive search and corporate advisory firm for the alternative investment management industry, launched DiversityMetrics, a software platform to combine self-reported diversity data and human capital management technology specifically designed for asset managers seeking to quantify, measure, report and improve workforce diversity and inclusion – both within their own organization and across their portfolios. The DiversityMetrics platform features a high-tech, high-touch approach that combines customizable data visualization tools with verified demographic data on more than 25,000 investment and distribution professionals, including 8,000 who identify as having a diverse background, working at more than 600 global, alternative investment firms. “We know that the alternative investment industry has a diversity problem, and each new data point and anecdote provides added evidence that we can use to identify where the gaps are and make specific recommendations for progress on diversity, equity and inclusion (DEI),” said founder and CEO Sasha Jensen. “The power of the DiversityMetrics platform is that it allows alternative asset managers to quantify and qualify the intersectionality of race, class and gender across their workforce, and then use that data to make data-driven decisions about best practices and ensures that the slate of candidates in any given human capital engagement are richly diverse.” It is a product long overdue for the financial sector, which has had its share of diversity hiring problems for years.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media