4th Quarter 2004

The Recession – If It’s Over, What Do We Do Now?

This has been an unusual several years for all of us, especially those who have wondered for the past three years when the recession would end – job seekers and hiring executives, as well as executive recruiters. I halted my CEO letters in the second quarter of last year in anticipation of marketplace indicators that would bring all of us hope in terms of our economy and the job market. It has taken until now to be able to weave a thread through the subtleties of what has been happening this year, to be able to provide you with critical historical data as well as perspective about the future.

The recession presented the retained executive search profession with significant challenges to its viability as an industry sector – overall, the three year slump left the industry reduced by half with many boutique and mid-size firms closing their doors, global firms smarting from the pain of office closures and significant downsizings due to a nearly 45% decrease in revenues throughout the industry. In my opinion, this recession forced an executive search industry “correction” more severe than any reduction we had witnessed since the profession emerged decades ago.

So, what strategies are being implemented today that will help everyone regain solid footing whether they are a job seeker, a hiring executive or a recruiter? I am witnessing several things happening in the marketplace:

• Hiring Executives: I believe that companies and their leadership teams are being much more thoughtful in their hiring practices than they have in the pre-recession era. By that I mean that there are specific business strategies that support their hiring desires and decisions – as opposed to simply replacing talent with the same profile as in the past.

• Talent: Professionals have gained increased perspective about the blend of career goals and personal desires such that they are more comfortable in knowing what is their next best career step – the achievement of personal and professional balance is a strong theme on the part of the talent pool.

• Executive Recruiters: I can only speak from my firm’s perspective, but we are quite pleased to have our clients be much clearer in their motives for hiring as well as in their underlying strategies to recruit specific talent.

• The Marketplace: I believe that the pace at which the marketplace is regaining its footing in terms of new hires is also quite appropriate given the turmoil of the past three years.

All in all, the last quarter of 2004 and hiring in the next year should be stronger and stronger with each quarter.