June 18, 2020 – Over the past two weeks, recruiting software provider Thrive interviewed dozens of leaders, CEOs, founders, and managing partners from top executive search firms. They candidly shared how COVID-19 and the resulting social and economic impact will affect the executive search sector. Here are some excerpted conclusions from those discussions.
1. Like it or not, it’s wartime
While many executive search leaders are optimistic that the crisis will be short lived, nearly all agree that the severity will be high. “Firms are hoping for the best but preparing for the worst — redoing their planning and forecasts, reducing budgets, and revising cash flow plans,” Thrive reported. “Every executive search firm claims to be a trusted advisor. The next few months will show which ones actually are, and clients will remember who was there for them when the crisis is over.”
2. Recruiting will feel the impact earlier and rebound later
Over the past two weeks, many search firms have seen a significant drop in new searches. Thrive says many active searches are now on hold, waiting for the dust to settle. Late-stage searches are also stuck, as face-to-face meetings are impossible with social distancing and travel restrictions. “We’re also seeing that top candidates are unwilling to leave their current posts while their companies are in crisis,” Thrive said. “On the positive side, firms aren’t seeing a dramatic increase in canceled searches yet. And recruiter activity seems to be at or near average rates.”
3. Social distancing isn’t having the impact many thought it would
Search firms of all sizes are pleasantly surprised that transitioning teams to working remotely has been easier than they expected. In fact, many recruiting firms report that communication and team collaboration has increased. The main social distancing-related issue we’re seeing is the lack of face-to-face meetings between clients and candidates. Few companies are willing to hire an executive without meeting them in person. This situation needs further monitoring, said Thrive, if isolation, social distancing, and travel restrictions continue to increase.
4. Business development is hard, but not impossible
Many leaders from executive search firms are unsure how aggressive they should be with business development and where to start. “Owners and executives from search firms need to keep their lights on and provide a safe and fair work environment,” Thrive said. The need for strong leaders inside and outside of their businesses has never been higher. For those reasons, many search firms are actively going after new business from new and existing clients.
“A belief in the power of strong leadership is what got most of us into the executive search market, and it is strong leadership that will get many companies through the economic fallout of this pandemic crisis,” said J. Reed Flesher, founder and president of Thrive. “During times like these, leaders put companies on their backs, they inspire employees and build new leaders in the process.