Looking in the Rearview Mirror at Solid Year for Executive Search

In a new report, partner Dan O’Day of McDermott + Bull looks at what the coming months may bring in regard to search volume, hybrid work, and candidate sentiment.

March 6, 2023 – “Looking in my rear-view mirror, I can make it disappear, I can make it disappear, have no fear,” sang Anthony Kiedis of the Red Hot Chili Peppers. With two months of 2023 behind us, Dan O’Day of McDermott + Bull recently reviewed the past year and made some predictions for 2023.

Key areas that he addressed involved executive-level search volume (a proxy for growth), hybrid and remote work (what his firm’s clients are doing), and candidate sentiment (a talent mobility influencer).

Executive-Level Search Volume – An Indicator of Growth

Mr. O’Day notes that newly opened executive searches across all industries were down nearly 30 percent in Q4 2022, returning to almost pre-pandemic levels when compared to the multi-year peak seen in Q2 2022.

“The uncertainty in both public and private markets – driven by rising inflation being chased by rising interest rates; the ongoing war in Ukraine and its impact on global energy and food prices; and the lingering impact of the COVID-19 pandemic – have contributed to a slowdown in growth and executive-level hiring,” said Mr. O’Day. According to Pitchbook and Thrive, a one-quarter lag exists between public and private market fluctuations and leadership hiring.


All eyes, Mr. O’Day says,  are on the central bank and what it will do in the months ahead. “As I write this, the U.S. Federal Reserve is rumored to be considering a 0.25 percent hike instead of a 0.5 percent hike,” he said. “The optimist in me thinks we are tapering, China is reopening, and the days are getting longer – only good times ahead,” he said. “The pessimist in me thinks the Federal Reserve has been grossly wrong before, there is a war in Europe, and it’s snowing in Vancouver.”

Related: Targeting the Right Talent Pools

“I anticipate that the Q4 2022 low of newly opened executive searches, referenced above, is the bottom of the trough,” Mr. O’Day said. “While we will not see the peak that we saw in Q2 2022, newly opened executive search numbers will remain above pre-pandemic levels, indicating growth but below the peak. My inference is purely based on the conversations that I’ve had with…our clients. While there is uncertainty, opportunity seems to be a stronger force. The optimist won.”

Hybrid Working Environments

Although most of McDermott + Bull’s clients, regardless of industry, are clamoring for more return to work, remote and hybrid environments have become a currency for candidates and a cost-savings for some employers. Remote or hybrid arrangements comprised more than half of the executive-level searches the recruiting firm completed in 2022.





Mr. O’Day says that a related statistic could be telling: Searches conducted for roles with a remote work environment were completed 14 percent faster, placing candidates into positions more than 2.5 weeks sooner.

Looking Ahead

“We are seeing a groundswell of momentum in the return to work movement and I anticipate seeing completely remote roles decline in favor of corporate hybrid mandates of at least three days per week in the office,” he said. “However, if you want to attract an A-player and have the ability to offer a remote work alternative, consider playing the card. If you allow us to access a larger talent pool on your behalf, you may fill the search sooner.”

Candidate Sentiment – The Ability to Move Talent

Over the past couple of years, the volume of new search engagements contributed to an already demographically tight market, according to Mr. O’Day. “This supply and demand imbalance contributed to an increase in executive compensation, in some cases dramatically,” he said. “Very quickly, the candidate pool became keenly aware of this increase in cash compensation and individuals became more likely to answer calls from executive search firms.”

Dan O’Day serves as a partner at McDermott + Bull, based in the firm’s Vancouver office. He has 20+ years of search experience across a range of industries, including healthcare and life sciences, consumer goods, and food and beverage. In his practice, Mr. O’Day  partners with private equity firms and their portfolio companies along with public and private companies to assist them in sourcing and engaging executive talent.

“The tough news is that I expect the talent pool to become tighter over the next year,” Mr. O’Day said. “I’ve been in the search business since 1997 and have experienced my share of tumultuous markets.”

Mr. O’Day explains that two things happen simultaneously during such uncertain times:

• The candidate pool becomes risk-averse, driven by fear of the unknown.

• Mission-critical roles (e.g. CFO) become even more sticky, driven by leadership’s fears of losing key people when they need them most.

What’s Next

With almost 25 years of experience in retained executive search, Chris Bull, co-founder and managing partner of executive search firm McDermott + Bull, is often asked what his firm is seeing in the market and what he expects moving forward. In summarizing what he has seen over the last 24 months, and making predictions for 2023, he says he feels that he can speak for the search industry, not just McDermott + Bull, as he has relationships with many individuals across the firm’s various global search competitors. “As I believe most are keenly aware, what we have experienced with executive recruiting over the past two years has been historic in nature,” said Mr. Bull in a recent report. “Most firms within the search industry have been at or, in many cases, over capacity since Q4 2020.”

Mr. Bull recently offered his thoughts on what changes will be coming in the year ahead:

1. “At the risk of wandering slightly out of my lane, from what we are all hearing, we will certainly be moving into a recessionary period sometime during the first three or four months of the year,” said Mr. Bull.

2. The “candidate market” that we’ve all been navigating over the past 18 to 24 months will start to change. “I’m not suggesting that compensation expectations will be lower than what we’ve seen recently, but I am saying that they will stabilize, and this will allow us all to manage expectations when we collectively begin our search processes,” he said.

3. “Here is the tough news: Candidates will start hunkering down in 2023, meaning they will be less likely to quickly answer our calls or respond to our various forms of outreach as they look to mitigate personal risk,” said Mr. Bull. “While not as dramatic as what we saw during the ‘Great Reshuffle,’ candidates will most certainly look to stay with the devil they know vs. considering those they don’t.”

4. “This reality,” said Mr. Bull, “will sharply contrast to the environment we’ve operated in during the past couple of years, when it seemed like every functional leader was in-play and candidates had more than just a couple of professional opportunities to consider when they were considering a change.”

“We should feel fortunate that – with all of the readily available information shared by professional economists – the outlook for the 2023 American marketplace is something we can all digest and navigate,” said Mr. Bull. “Here’s to the close of 2022. We wish you the best over the holiday season, and throughout the year ahead.”

Irvine, CA-based McDermott + Bull provides mission-critical permanent executive placement and interim solutions for a range of domestic and global clients. The firm serves private and public companies, private equity firms and their operating companies across multiple industries, including technology, financial services, biotech and life sciences, and professional services.

Related: Executive Hiring Predictions for 2023

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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