How the UK Executive Search market has changed in the last year

How the UK Executive Search market has changed in the last year

Executive Grapevine
Executive Grapevine | Executive Grapevine International Ltd

The last 12 months have been defined by political, legislative and economic unpredictability. As a result, Executive Search has been tasked with adapting to ongoing macro-sized changes to fulfil clients’ hiring needs across multiple business sectors.

In the face of these continuing challenges, Executive Grapevine’s 2016/17 UK Executive Search Rankings Report highlights the overall resilience – and in some instances growth - search firms are displaying. The entire Executive Search market is up by 4.2% on a like for like basis against GDP growth for the same period of 2.0%.

This growth, explains Helen Fish, CEO, Executive Grapevine, is indicative of the Executive Search industry - which has always been flexible when facing up to challenges presented by an ever-changing marketplace.

She says: “Executive Search has continued to grow since this report started tracking the industry 16 years ago. Looking at trends in the search industry over the last twelve months has shown us the high regard with which the Search industry is held.

“It has proved adaptable and always comes out on top during times of transformation, demonstrating strategic resilience as leadership teams, within its client-base, look to adapt to changes within their particular industry.

“Yet, despite the makeup of Boards changing, client strategies evolving and different leadership skillsets coming in, and out, of vouge, our results show that the industry continues to play its role as an important strategic partner to its clients.

Kester Scrope, Chief Executive at Odgers Berndtson, added: “Whilst last year saw an increase in both political and economic uncertainty, the market stood up surprisingly well. There were winners, as well as losers, from the devaluation in sterling and digital transformation continuing to drive movement. Uncertainty serves to underlie the value of strong leadership.”

Whilst Nigel Parslow, Managing Director at Harvey Nash, explained that despite ongoing challenges, clients still saw the utility in using Search firms for Executive hiring.

He said: “Clients have always used Search firms and they only use them when they have an issue with resourcing or they don’t have the expertise; or they just don’t have the number of staff to do the work. The reality is the volume of Search has gone down significantly because of things like LinkedIn. However, it’s all about the value-add. If clients didn’t believe in the value-add they wouldn’t use Search.”

John-Claude Hesketh, Partner - EMEA & Asia Pacific, Marlin Hawk added: "Our industry will continue to be disrupted by technology and Search firms should embrace this rather than fear it. The reality is high calibre advice and true partnership is still valued by senior executives. Consultants that provide genuine insight and value will always have a place in the market; solely transactional individuals, however, will find their futures looking very bleak indeed."

Simon Hearn, CEO, Per Ardua, also commented: "The demand for key functional hires and Non-Executive Directors has remained consistent but there has been a marked increase in searches for key business leadership roles. We think part of this surge is that clients wish to use specialist boutique firms who have a detailed knowledge of their markets."

This year’s report indicates that Search assignments for roles which guarantee £200k were dominated by work with Global Banking and Asset Management clients. This sector made up just under a quarter of all £200k+ searches (24.4%) - although it dipped down from 26.4% in the previous 12-month period.

Consumer, Media & Healthcare had the second largest share of assignments for roles over £200k, accounting for 16.5% of all searches. The third largest share for roles over £200k came from within the Industrial sector, which accounted for 15.7% of all assignments.

Clients also retained faith in the value add of executive search firms when hiring for Board and C-Suite level roles – with 7,124 new assignments for roles over £200k. For Board and C-Suite assignments, Korn Ferry was ranked as the number one Search firm with a 12.3% market share of Net Fee Income. Egon Zehnder placed second with a 11.6% market share whilst Spencer Stuart & Associates made up the top three with a 10.8% share.

David Heron, Group CEO, Wilton & Bain explained that it was positive that clients, across multiple sectors, saw the demonstrable utility of Executive Search firm's services.

He said: "Clearly LinkedIn and other social media support the identification process when sourcing talent. But identification is the easy bit. What they can’t replicate is the rigour that a search firm can bring to a process, nor the objectivity of perspective or currency in the market place that comes with working with a professional search firm - you still need experts to manage strategic hiring.

Bianca Coulter, CEO, Coulter Partners also noted the increased variety in the type of searches that Executive Search firms were undertaking. She added:“Efforts to drive diversity are definitely beginning to pay off with more female CEOS and female candidates at the C-level. Plus we are seeing greater flexibility on location and co-location - this is having a positive impact.”

For all search assignments undertaken, Global Banking & Asset Management made up 22.1% of the market. In second place, searches for Consumer, Media and Healthcare clients made up 17.1% of all assignments. The Industrial sector placed third with 15.3% of all assignments taking place in this area.

What also remains consistent is the dominance of the top 30 multi-practise firms in the hiring market for roles over £200k p.a. Together, these firms enjoy a 92.2% market share. In the overall rankings, the top 30 firms also increased their market share to over 80% compared with 74% during the 2015/16 period.

The Executive Grapevine 2016/17 UK Executive Search Rankings Report covers Executive Search firms that focus on using a Search-based methodology for the majority of their assignments, including a minimum fee, and where first year remuneration guarantees £100k plus.

The report also highlights key consultants working in each of the market sectors with links to individual profiles and firm competencies in each of the key specialist practise groups – Board & C-Suite, Consumer, Media & Healthcare, Retail Financial Services & Insurance, Industrial, Technology & Telecoms, Professional Services, Global Banking & Asset Management, Pharmaceuticals & Life Sciences, Government & Not-For-Profit and Public Sector.

To read more about the individual sectors and to see where search firms ranked within each of them click here.

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