Spotlight: Executive Recruiting In Europe: Uncertainty and Resilience
March 1, 2023 – Raffaele Jacovelli is managing director at digital-focused executive search firm Hightech Partners. The firm leverages forward-looking methods such as big data analysis and artificial intelligence into the executive search process to help companies embrace new ways of working. Hightech Partners has offices in Brussels and Geneva, Switzerland with local partners across the major regions of Europe. The firm also founded ITP Worldwide, an alliance of specialized search and consulting firms in the technology industry in the U.S. and Asia.
Since joining Hightech Partners in 2006, Mr. Jacovelli has facilitated hundreds of top-level international recruitments. His areas of expertise include software, hardware, and services, ranging from artificial intelligence and advanced analytics to real-time and high-performance computing to cybersecurity, IoT, mobile, cloud, Saas, and PaaS.
Mr. Jacovelli recently sat down with Hunt Scanlon Media to discuss the European search market, which segments are hot and what impact the war in Ukraine has had.
Raffaele, give us an overview of what you are seeing in the European search market. What countries are hiring the most, and which are not?
2022 was been a record year for the European search market. For us at Hightech Partners, being focused on cyber tech and digital transformation, the growth has reached a staggering 48 percent. Nevertheless, at the dawn of 2023 we are noticing a pervasively dominating uncertainty. As matter of fact, Europe has faced a slowdown in Q4 but limited if compared to the U.S.; in its main geographies, Germany and France, the slowdown has been approximately four-fifths percent vs. 13 percent in North America. The month of January has seen a recovery though, with a level of new assignments in Germany actually higher than last year, while in U.K. the situation is still lagging behind. Italy seems to keep the same pace of France.
What is the labor market like?
The labor market is still tight, aggravated by last minute withdrawals of record number of candidates that have rejected offers. In our case the consequence has been that we had to restart 20 percent of all the mandates. We are aware that this has been a common problem across the board for executive search firms in Europe. A post mortem analysis has shown that the reasons for these withdrawals can be grouped into a few categories:
- Candidates had several options at the same time hence it ended-up in a beauty contest where the drivers were: level of compensation, work-life balance, possibility to work from remote, hiring managers leadership skills, and company values.
- When resigning, the current employer has made a counteroffer, promising better working conditions and internal career development.
- The recruiter has done a better job at “selling the opportunity” vs. the hiring manager.
What effect has the war in Ukraine had?
Since 2020 we have been living in a context of “poli-crisis.” While COVID with its harsh lockdown has had a dramatic impact on the European economies, the European Commission has reacted promptly and boldly with funds to support the recovery. In 2021, we have seen a return to the same business level before COVID, then the rise of energy prices started to have an impact that the war in Ukraine has further fuelled, igniting an increase of inflation to a level not seen in the past four decades. Paradoxically, the war in the first half of 2022 has had a lesser impact than the energy costs, as most of the people while shocked by the war did not expect it to last long. Surprisingly, one year later, the feeling is that the war will last longer. The massive investments of the European governments — and the U.S. — in providing support to the Ukrainians have generated an up-side in the aerospace and defense market. The life sciences industry that has played a key role in facing the pandemic has also driven a strong demand as well as the energy industry that has seen a development towards alternative sources, accelerating the green evolution. The combination of the above has provoked a strong uprise in vacancies, with the creation of new job roles related also to the sustainability domain. Those companies that operate hence in these technology-driven industries will continue to see a strong demand in the future.
What do you foresee for the search market in 2023?
Somehow, while the world leaders are questioning themselves on the sustainability of the “globalization” model, the economies are demonstrating an unexpected resilience: We have to learn to live in constant uncertainty, which implies that those that are well equipped to react rapidly with great deal of courage and determination will succeed. Hence, we believe that the search market will continue to grow selectively with wide swings up and down during the year, but yet with a positive balance at the end, although having the executive recruitment market reached in 2022 the $ 20 billion mark, it might seem difficult to keep the same pace.
Is your firm looking to expand into any new areas in 2023?
We are planning to continue our expansion in 2023, trying to take advantage from the uncertainty. On one hand we will continue our quest to bring on board additional partner level consultants, to cover competencies and geographies. In particular, we are planning to open a branch in Middle-East where we have started making placements in 2022 and we have several ongoing projects. In addition, we are discussing various acquisition/merger options with other complementary players with the same level of track record and image.