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Strong momentum in the human capital management (HCM) space will benefit the search industry and drive future growth.
March 27, 2024 – Hunt Scanlon Media releases the annual productivity report of the leading executive recruiting agency. In the U.S. and globally, billions of dollars will pour into high-end recruiting in 2023, but at a slower pace than in previous years. “Market volatility and economic weakness have impacted most executive recruiters who have endured a challenging year,” said Chief Executive Officer Scott A. Scanlon. Hunter Scanlon. “The recruitment industry dropped by 12.2% in 2023, with the most severely affected being the recruiters who provide services for the technology stack. Venture capital and high-growth companies. “
Data analysis conducted by Hunt Scanlon shows that 70% of the top 50 US recruitment companies have experienced negative growth.But there are exceptions: No. 22 Modern administrative solutions With a growth of 40%, it will become the fastest growing headhunting company in 2023. Number 7 Sino-Swiss partnersDriven by programmatic mergers and acquisitions, the ranking rose by two places and grew by 31%, becoming the fastest growing search company among the top 20. Academic searchits revenue grew by 32%, Bay Street Consultantsrevenue grew 31.4%, and Crist | Code Associatesan increase of 16.4%.
“Strong momentum in human capital management (HCM) will benefit the search industry and drive future growth,” said Mr. Scanlon. But search remains a highly cyclical and fragmented market. “For this reason, M&A is a key lever for industry leaders as they seek sustained outperformance over the next decade.”
Driving the consolidation trend are the acquisition targets themselves. Hunt Scanlon said that in a recent poll, 51% of headhunting firms planned to explore M&A solutions in the next 24 months.
“An equally important lever associated with M&A is diversification,” Mr. Scanlon said. “Acquisitions of new HCM vertical platforms—including contingent and on-demand talent solutions, leadership assessments, coaching, and culture consulting—are picking up pace. These products, with more stable and recurring revenue streams, will position the recruitment industry for macro Economic headwinds are more resilient,” he noted.
Companies interested in focusing their attention on this strategy are Korn Ferry. in the past year, Company strengthens interim and interim management capabilities with acquisition of Patina Solutions Group.Also last year, Korn Ferry acquired Salo LLC, a finance, accounting and human resources temporary staffing provider.
Heidrick & Struggles acquires Business Talent Group
Heidrick & Struggles, a provider of executive search, leadership consulting and culture shaping services, has completed the acquisition of Business Talent Group (BTG), an on-demand marketplace for high-end independent talent. Financial terms of the deal were not disclosed. The addition of BTG complements Heidrick & Struggles’ strategic growth plans to expand its suite of executive talent solutions to meet new and ongoing client needs and builds on an exclusive two-year partnership with BTG that began in 2019 on the basis of. BTG will continue to be run by co-founders and co-CEOs Jody Greenstone Miller and Amelia Tyagi and as a wholly owned subsidiary of Heidrick.
Mr. Burnison said: “This merger provides real, tangible opportunities for Korn Ferry and our clients who are looking for the right talent that is highly agile, has specialized skills and expertise, and helps them achieve superior performance, including on an interim basis. .” “Patina provides an ideal solution for today’s nomadic labor market.” Patina brings temporary execution solutions expertise across multiple industry verticals to Korn Ferry. Patina’s network of chief executives and interim professionals spans professional functional areas including finance, operations, legal, human resources and IT. “With the acquisition of Salo, Korn Ferry will further expand its ability to provide organizations with experienced professionals who will serve in impactful roles on a temporary or ad hoc basis, particularly in finance, accounting and human resources. and other high-demand areas,” Korn Ferry said.
related: The 5 Biggest Executive Search Trends in 2024
This diversification of offerings beyond traditional search is not unique to Korn Ferry, and companies that have been providing ancillary services such as cultural consulting and partial placement are reaping the rewards. “ZRG has adapted to almost all of these trends over the past few years,” said Larry Hartmann, CEO, ZRG. “When we started, we were a single-practice retained executive search firm. We now have four lines of business (Search, Temporary, Consulting, RPO) handling talent needs for clients around the world. We have diversified our offerings because we want to say yes to more customers in their time of need. “
ZRG Acquisition “Does What It Says”
ZRG acquires Walking the Talk, a consultancy focused on cultural transformation. As a pioneer in the field, understanding the impact of culture on growth, performance and reputation, Walking the Talk has grown to become the largest consultancy focused on the culture agenda. The company operates globally and provides dozens of services to its clients, ranging in duration from a few months to a few years. “Hiring top talent that aligns with our clients’ cultural goals has always been a key factor in ZRG’s success,” said ZRG CEO Larry Hartmann. “With the addition of Walking the Talk, we will expand our consulting and talent solutions capabilities to help our clients address challenging topics such as change management and culture transformation. Developed by Carolyn Taylor and her team, Walk the Talk Intellectual property rights will enhance our ability to understand, measure and evaluate cultural contributions at multiple levels. We see the tremendous power that comes from the combination of two companies. “He said.
last year, ZRG acquires Registry, Interim execution solutions firm in Peabody, MA, specializing in higher education. Since 1992, the Registrar has assisted colleges and universities in the United States and abroad during times of transition through experienced and diverse interim leaders. The company has provided 1,200 internship opportunities in more than 500 various organizations. Two years ago, ZRG also acquired Walking the Talk, Consulting firm specializing in cultural transformation. Headquartered in Amsterdam, we focus on improving performance through the combination of culture and strategy. In the 11 years since the company was founded, culture is firmly on the agenda of most executive teams and boardrooms.
Coaching and Assessment
Coaching and assessment have also become integral to career development in the corporate world, and executive search firms have taken notice. realHunter Scanlon finished sixth, Recently acquired Bleeker, an executive coaching and assessment firm. Bleeker’s assessments are derived from neuroscience, and its inquiry-based coaching service has been rebranded as True Advance and is now part of the True product and services platform. “True enhances our comprehensive talent management platform through comprehensive assessment and coaching, solidifying our role as a strategic partner to businesses and helping them build leadership,” said True co-founder and CEO Joe Riggione. “True enhances our comprehensive talent management platform. Advance provides leaders with valuable insights about themselves while providing companies with transparency into potential employee performance and alignment with existing leadership team dynamics.”
related: Recruitment firms continue to focus on winning new business in 2024
“Comprehensive assessment and executive coaching solutions are one of the fastest growing areas in executive search,” said Mr. Scanlon. “It all ties into the comprehensive human capital model that we’ve been helping our buy-side clients think about and build. If we think of human capital solutions as a matrix, it’s easy to see team building, employee engagement surveys, culture assessments , leadership consulting and executive coaching can work together to provide a highly layered strategic approach to talent. It has been a slow process so far, but we believe integrated human capital solutions are the new growth platform for executive search firms ,” he pointed out.
The Christopher Group also acquired Six Peaks Leadership, an executive coaching and leadership development firm. “We are extremely excited to continue to innovate and add value to our current and prospective clients,” said Nathaniel Schiffer, Managing Director of The Christopher Group. “This acquisition not only expands our capabilities but also enhances our commitment to assisting clients in developing effective Dedication to leadership and promoting positive change within their organizations.”
Other highlights from Hunter Scanlon’s report:
- Hunt Scanlon The fee-based revenue of the “Top 50” U.S. recruitment companies in 2023 was US$6.047 billion, a decrease of 12.2%.
- Hunt Scanlon Global “Top 5” recruitment firm reported professional fees of $6.731 billion, down 3.9%. Russell Reynolds Associates moved up two spots to second place.
- Waves of consolidation and diversification in the HCM market will drive M&A activity in 2024 and into 2029.
- The headhunting industry is expected to grow by capitalizing on the strong momentum of the HCM market. This will be driven by advances in artificial intelligence and technology – which will improve service delivery and efficiency – as well as growing demand for strategic human capital consulting solutions.
To view Hunt Scanlon’s latest rankings, please visit https://huntscanlon.com/top-50/
Written by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor, Hunt Scanlon Media
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