by Mike Travis
2011 is shaping up to be a good year for executive hiring. An improving business climate, a loosening of VC investment, and a hint that the public markets are reopening are all cause for optimism.
Executive search firms are seeing concrete evidence of the improving economy. At a recent meeting of New England executive search consultants, the vast majority of us reported a strong uptick in business starting last summer. The two publicly-held search firms, KornFerry and Heidrick & Struggles, have also reported robust growth.
While most executive search consultants expect a strong 2011, we don’t have a great track record when it comes to predictions. Many, myself included, thought 2009 would show gradual improvement. We were wrong. This time, however, there is a lot of data to support our optimism. Here are some examples:
- A January 1 article in the Wall Street Journal titled Big Firms Poised to Spend Again points to strong balance sheets, record cash reserves and renewed optimism that have many companies planning to dramatically increase investment in 2011. Some of those investments will be in people. Cummings, for example, plans to add 2,500 US employees in 2011, a big increase from the current 14,800.
- After two years of cutbacks, companies are again hiring internal recruiters. The WSJ reported on December 19 that job postings with recruiter in the title increased 20 percent from June 2010 to November 2010. The article also cites a survey by CLC Recruiting that showed about half of companies plan to increase their recruiting staffs in the next six months, a stark contrast to the 6 percent that were planning growth at the same time last year.
- Challenger, Gray & Christmas, an outsourcing company, reported that 2010 job cuts fell to the lowest level since 1997. It’s reasonable to infer that many companies have cut to the bone, and will need to hire to handle even modest increases in demand.
- ADP’s December National Employment Report showed very strong growth in private employment across all major industries, a continuation of accelerating gains in employment since September.
There are still many risks. After a harrowing and long recession, companies will proceed with caution. But despite the downsides, the momentum in employment is now undeniable.
What does this mean for companies and their executives? If improvement in executive hiring continues as expected, companies will face growing competition for the best talent. In addition, executives will have more options, and retention will become a major problem as top performers find new opportunities where they can realize their potential.
Mike Travis has been an executive search consultant for 15 years. His accomplishments have been recognized by BusinessWeek, which selected him for its list of "The World’s Most Influential Headhunters." Mike’s practice focuses on recruiting general management, function heads and board members for medical device and biopharmaceutical companies. He can be can be reached at (978) 878-3232, ext. 112, or by email at firstname.lastname@example.org.