Spotlight: How Executive Search is Thriving in Canada Despite Pandemic

February 17, 2022 – Lisa Newey is senior managing partner at Newey & Co., a financial markets recruitment boutique located in Toronto. A seasoned financial services recruiting executive, her foundation of knowledge and extensive network is based on her 15-year career in capital markets in North America and abroad. Ms. Newey has a passion for problem-solving. Formerly both an equity research analyst and an institutional salesperson, she brings a high level of rigor and diligence to the recruitment process. Ms. Newey honed her executive search skills at Spencer Stuart and further developed her focus on capital markets recruiting at specialty boutiques. Her expertise covers a wide range of capital markets functions and seniority levels, on both the buy-side and sell-side.

Ms. Newey recently sat down with Hunt Scanlon Media to discuss what she is seeing in the executive search market in Canada and beyond.

Lisa, what are you currently seeing in business across Canada?
We are seeing more counter-offers, more openness to change on the part of employees, more reflection and more hiring in general, due to the vast disruption that COVID has had on our workforce and routines.

How do you think COVID will continue to affect businesses in 2022?
We believe that COVID has had a permanent impact on how employees see their careers vis a vis work/life balance. Meanwhile, employers who’ve embraced flexible and remote work options are seeing the benefits of a broader and deeper candidate pool. This shift can only improve the quality of the workforce and, simultaneously, the satisfaction that the average person gains from employment. Most of all, we believe that the overall impact will be to improve the efficiency with which work, and the labor force, is distributed. For those employers who have not permanently introduced flexible working options, at least to some degree, they are going to lose out on top-quality employees. The proverbial horse is out of the barn on workplace flexibility, and the result is a welcome improvement in the coexistence of work and personal lives.

Describe the impact of COVID-19 on your business.
We are a relatively new business, so it’s difficult to know what could have been had we had a pandemic-free year. That said, I’ve been working in the institutional financial markets sector as both an employee and a recruiter for 25 years and I have never seen this degree of mobility. From a recruitment standpoint, I have personally never been so consistently busy – at capacity, really – in my entire recruitment career and I am hearing the same from our competitors in the financial services space.

What’s changed?
Workplace flexibility, career reflection and mobility. These factors are impacting the number of new openings and empty seats that need to be filled.

What positions are you seeing most in demand? Which sectors are hiring the most?
The areas that we see as being in demand have tended to fall in the mid-seniority level, and are across the board in the financial markets space in which we specialize. Layered onto this remains the usual seasonal effect, increasing demand for professionals who are expert in all-things tax-related, for example. There are also a lot of inbound calls from clients about middle-office roles (think, operations and compliance) where the positions might have been more in-office previously but are now potentially remote roles. Increased work-from-home flexibility has meant that geography is now less of a barrier – and demand is high for this option. Technology is always a high-demand area and has only intensified since the pandemic started. Although we don’t recruit for technology professionals directly, we work on the offshoots of this sector. For example, mandates related to the financing of technology companies or equity research analysts who cover the sector on behalf of broker/dealers. We’re finding that competition for talent in this area is fierce, and compensation is being driven higher as a result. A top-quality candidate who I know recently accepted a counter-offer from his employer that was based on $1 million worth of stock options, while his annual total compensation had previously been less than half of that amount.

Can you share some recent search work completed by your firm or any ongoing assignments?
We recently placed a chief financial officer for a commercial real estate developer and investor. We’re working on a hybrid equity research analyst/portfolio manager role for a technology-focused long/short hedge fund and just successfully closed a chief compliance officer assignment for an alternative trading platform. Recent requests for pitches include partner-level asset management consultants and a CEO for a portfolio company of a private equity firm.

What do you see for this market moving forward?
I firmly believe that the pandemic has changed the face of work as we know it – or have known it, is perhaps a better term. Lockdowns and isolation, while emotionally challenging, have also presented an opportunity for self-reflection and that inclination is not going to go away with the last mask mandate. Layer on, the recent broader acceptance by employers of remote working and flexible schedules, and it’s not hard to see that the candidate pools for individual roles is going through an upheaval. With that in mind, the increased mobility that we’ve witnessed for the past couple of years is likely going to take at least a couple of years to work through the system until we settle into a new sense of order. For recruiters, it’s good news for the medium-term outlook, in my opinion.

Why is Canada an ideal place to set up an executive search firm?
Call me biased, but I do agree that Canada is an excellent place to set up an executive search business. The country’s dispersed population alone makes it logistically challenging for employers to search broadly within Canada for senior executives, so there is an argument for bringing on outside providers right out of the gate. However, not to be too simplistic about it, when I consider the prospects for the recruitment industry broadly, I think that it boils down to three factors: (1) Is there executive hiring? The degree of movement and growth trends in the economy are a couple of proxies for the outlook on this factor; and, (2) Is there a need for outside services providers? In a tight labor market, where employees are the scarce resource, one would likely say yes; and, (3) are there too many or too few recruitment firms?

Looking at some of the most recent Statistics Canada (StatsCan) data, we have a couple of strong indicators regarding the health of our Canadian permanent placement/contract staffing market, that generated revenue of Canadian 7.3 billion in 2020. With full-time employment trending up for the past six months to a level that was 1.6 percent higher (Dec. 2021) than healthy pre-pandemic levels, we most definitely have a tight labor market. You don’t really need the data to see it, though. Just ask any Canadian executive recruiter when they last stopped to take a breath. In terms of economic strength, despite the pandemic-related slowdown, the Canadian economy has shown resilience but, more importantly, our economy is well-developed and diversified, which bodes well for the long term.

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