Jun 27 2010
"Companies cannot wait for recovery,
they must invest and develop"
BlueSteps: What Happened to executive search in France during the recession of 2008-2009?
Albert Hiribarrondo: The recession hit the headhunting market precisely in November 2008 - within one month, growth had dropped 30% compared to the regular 2-digit growth month by month since 2003. The activity continued to remain at this reduced level (-30%) in all the months that followed, making the year 2009 a ‘depressed’, ‘dark’ if not ‘black’ year for the sector. The Association of Executive Search Consultants (AESC) Q3 industry report confirmed this trend for 2009 with revenues reaching less than 40% pre-recession levels until November 2009. Figures from the l’agence pour l’emploi des cadres (APEC) announced a 24% drop in middle management recruitment. Interim recruitment also suffered throughout 2009 with revenues down 44%.
It is important to note, however, that the executive search market has grown by more than 20% per year for 5 years; revenues down 30% in France brings the industry to the levels experienced in 2006 or 2007. Thus, in the headhunting companies, small savings were not enough. We had to reorganize and implement many cost reductions (pay levels have fallen, layoffs have occurred), and diversify the services offered: many of the large firms offered in addition to headhunting, ‘talent management’ audits of executive teams and coaching, amongst other services. In addition, executive search firms have renegotiated their contract lengths, revised their charges to the client through measures such as reducing billing for secretariat staff, and sacrificed the consultants clearly not profitable enough. The ultimate objective was to balance each firm.
Clients are still not keen on hiring and have postponed several executive searches (with a hiring freeze of more than 12 months in financial services/banking industry). Clients only recruit for indispensable vacancies to fill essential new positions, gaps in internal candidates for export markets or cultural fit, or to hire someone who knows the latest technologies, etc.
However, executive job candidates must remain confident, the market is vast. For each candidate, all it takes is one suitable job offer. Executive job opportunities will continue to exist in a great number.
2. What happens there in the field of recruitment in France at present?
The market is returning in 2010 with revues increasing 20% from January to March 2010 as compared to the first quarter of 2009. April, May and June of this year have seen an increase of 35-40% as compared to the same months in 2009. Will this last? Nobody knows ...
3. What are the prospects in France for the remainder of 2010 and beyond?
The economic indicators, falling stock markets (the weaker euro encouraging our exports but penalizing our imports) and the difficulties facing the public sector, are all negative factors. But companies cannot wait for recovery, they must invest and develop (money is not too expensive - interest rates still allow for borrowing). The outlook remains uncertain and we must approach with a relative caution. However, if 2010 experiences no new low in September, it could be a year of quiet breathing and further procession of many business models (carbon, social media, public sector reform) before tackling the challenges of 2011 and 2012 election after election - political changes often offer periods of enthusiasm and growth (at least for half of the country…).
After 2012, all indicators suggest strong executive recruitment needs - a new generation with new challenges, new attitudes, new management styles, new trade with emerging countries and new international growth.
Until then, the fundamentals in our personal and professional projects will remain strong. Maintain a clear position, stay connected to the markets and be "prepared for the worst and ready for the best."
Albert Hiribarrondo - AESC member
Associé SIRCA Executive Search, Paris, France Président IMD International Search group. SIRCA Executive Search in France, along with 300 other member executive search firms worldwide, have access to the BlueSteps database of over 58,000 senior executives to source candidates. See more info below.
This report is available in French.
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