The value of all executive search assignments within Retail Financial Services & Insurance increased by 11.7% in the last 12 months.
This has predominantly been driven by a focus on roles with guaranteed compensation packages over £200k (including Board & C-Suite) where there has been a 15.6% rise. Roles at this level accounted for 857 of the 1,241 Retail FS & Insurance assignments conducted in the last year. Suggesting that organisations within these sectors are choosing to use executive search firms for their most senior roles rather than fulfilling them via in-house resourcing teams.
One of the reasons for this is down to the increased scrutiny organisations within the sector face with hiring. Not only do they need to have the right skills, industry experiences and capabilities, but for Board roles they also have to comply with regulatory codes. This is almost impossible without the external perspective and due diligence search firms bring to the process.
Secondly the increased competition from other industry sectors to acquire the best talent has increased dramatically. Leadership skills within the digital, customer-centric, world of retail banking and insurance, where demand already outstrips supply is becoming a bigger a challenge, and one that increasingly requires a creative approach in compiling a shortlist.
Retail FS & Insurance now makes up 13.2% of all hiring at this level across the executive search industry. The only other sectors to see more activity are those facing equally high levels of change; Global Banking & Markets (26.4%), Consumer & Media (16.8%) and Industrial (15.8%).
Experienced hires where compensation levels fall between £100k - £200k have dramatically fallen by 9.7% in the last 12 months.
Helen Fish, CEO of Executive Grapevine, says: “Banks are facing an increasing amount of external pressures when it comes to their spending and so in-house search functions continue to support the reduction in hiring fees at this level. This has been aided by social media tools such as LinkedIn. However, it remains to be seen how effective they will be at approaching potential candidates once the new data protection regulations come into force in 2018 where the onus will be on candidates coming to them.
“However, at the very top level, banks seem to have recognised their need for headhunters and the expertise required to source hard-to-find individuals with the right skillsets. Board & C-Suite hiring never seems to falter and the value of these assignments has increased every year without fail.”
Although hiring at the £200k+ level has continued to rise, the search firms operating in this space are aggressively competing for market share, the top 15 search firms handle over 80% of the assignments.
Why is this important?
Clients certainly expect search firms to partner with them to understand the culture and value proposition. But the depth of research to identify talent with the insight to deliver, the technical knowledge and business experience a candidate needs, demands a substantial investment by the search firm. It’s becoming impossible to be a generalist headhunter in this sector - you have to become a master.
With off-limits also to consider, it’s becoming as much a tactical relationship between client and search firm, as it is a strategic one. Clients need to work with a search firm that can reach the candidate market, get them to take the call and has an insight into their performance. This means they have to specialise in their networks, whether it’s geography, level, product or function, boutique firm’s networks will differ from those of their international competitors.
Who is leading the way?
The tables this year distinguish between search firms whose sole focus lies within the financial services markets (boutique firms) and those that are part of organisations with a wider number of practice areas (multi-practice firms).
Among the multi-practice firms Marlin Hawk topped the list for all assignments over £100k for the first time, holding a market share of 13.4%. Overtaking the more traditional global search firms such as Korn Ferry (12.9%), Egon Zehnder (10.5%), Odgers Berndtson (10.3%) and Spencer Stuart & Associates (9.7%).
When ranking these firms on just their £200k+ assignments, the same five appear at the top. However, Korn Ferry leads (13.6%) with Marlin Hawk (12.7%), Egon Zehnder (10.8%), Spencer Stuart & Associates (10.2%) and Odgers Berndtson (9.5%) following respectively.
Per Ardua dominates both tables at the more focused boutique level. Across all assignments over £100k the firm has a 21.6% market share, and for those over £200k Per Ardua holds almost a third (31.3%) of the market share. Sainty Hird, Leathwaite International and Hanover Search Group also rank highly on both tables.