Annual State of the Executive Search Industry report shows 9% uptick over 2010.

2011 data just released by the Association of Executive Search Consultants (AESC) shows that the retained executive search industry experienced continued momentum during 2011 with a 9% yearly increase bringing total industry revenues to an estimated $10.41 billion. 2011 saw the third highest revenues on record for the industry, not far off from all time industry high of $11 billion reached in 2008.

1. Determine Your Emotional Appeal

2. Determine Your Description

3. Determine Your Function

4. Put it All Together

With the unemployment numbers in the United States hovering at greater than 8% for an extended period of time, it surprises a lot of people that many surveys and comments from business leaders across the country identify one of the biggest risks that U.S. Companies (large, mid-cap and small businesses alike) face is a talent and skills shortage.  In fact, in a recent survey carried out by the Economists Intelligence Unit, the shortage of talent and skills ranks number 2 in terms of the highest risk to growth and profitability of American businesses. 

Many business leaders have commented that they see that businesses have gone from a credit crunch to a talent crunch, despite the historically high unemployment numbers.  Many people that I come into contact think that the Executive Search business must be in a down period because of unemployment when, in reality, the opposite is true. 

By: Gary Payne, Senior Partner

Changes in productivity and wages over the past decade mean that it is now cheaper for companies to hire workers in Germany than in Spain, says Morten Olsen of IESE Business School. Between 2000 and 2008, productivity rates in Germany increased 13%, while in Spain they rose just 5%. At the same time, Spanish workers' pay climbed 38%, while German workers' compensation increased only 14%. Olsen questions the wisdom of Spain's recently proposed austerity measures, saying structural issues in the country's economy are more worrisome than the public deficit.

One of the least understood and most underutilized positions is that of the chief financial officer. Far too many CEOs and boards focus on recruiting a CFO who is a technical whiz in accounting and finance while overlooking the role most effective CFOs play as business partners at the general management table. One of the wisest and most effective CEO and board members I have ever known talked about hiring a CFO in the same manner a president would think about selecting a vice presidential running mate. His view was that ideally, a CFO should be able to fill his seat in the event something happened to him. I’m not sure that every CFO needs to be an heir apparent to the CEO, but it does put the importance of this search in the proper perspective.

By: Rob Andrews

Chairman & CEO

Why companies choose retain a firm like Allen Austin Global Executive Search?   The over-riding reason is the desire to build a world class leadership team.  Within that primary objective, often our clients, whether it is the Board or the current leadership team, desire to change the culture of their company in order to ensure future growth and success.  Many times there is a need for an infusion of leadership that has already implemented the culture that the company wishes to establish. 

By: Gary Payne, Senior Partner

If companies around the world calculated the true cost of poor recruiting decisions of corporate leadership hired they would definitely work much harder to prevent them.   They would do whatever it takes to improve the probability that a new leader will stay and succeed with the company.  But, many companies have no idea what the true cost is of a bad executive or leadership hire.   So, what goes into determining the true cost of a bad executive hire? 

Estimates of the true cost of a bad executive or leadership hire have ranged from a low of 10 times the annual salary to, in some cases, hundreds of times that same six-figure management salary.  All companies are different so it is impossible to make a broad statement of the real number.  However, it is possible to determine the different costs that go into the calculation.  At the highest level, there are two different cost structures that go into determining the cost of a bad leadership hire, direct and indirect costs. 

By: Gary Payne, Senior Partner

One of the key metrics which our firm, Allen Austin Global Executive Search, tracks is our Offer/Acceptance ratio.  One of the easiest ways to dissatisfy a client in our business is to go through an entire search process, assessing fit, personality, culture, etc….only to have the candidate turn down the offer.  We are extremely proud of our 97% offer acceptance rate on over 2,300 searches we have done in our 16 year history.  One of the key components of every leadership search is to ensure a successful acceptance offer from a chosen candidate.  The leadership compensation plan is obviously critical in not only securing the offer acceptance, but, even more importantly, ensuring that the desired performance level of the chosen candidate is achieved. 

By: Gary Payne, Senior Partner

Recent research indicates that the failure rate for senior level executives placed into a new position or assignment is extremely high; with failure rates approaching 45% at the two year mark. There are also statistics that indicate the total sunk cost of a failed leadership hire can be as high as 24x total compensation.  At a time when there are dramatic shortages of leadership talent world-wide, it is little wonder that the issue of executive or leadership integration is becoming more and more critical to the overall success of a company.  Failure of a key leadership hire is a major setback for all concerned – the executive him/herself and the missed opportunity and sunk cost for the organization.  In some cases, a failed leadership hire can represent failure of an entire company or division.

By: Gary Payne, Senior Partner

Over Allen Austin’s 15 year history, our firm has performed over 2,200 retained searches.  There are many reasons why an individual client would come to us to scour the market for the absolute best fit candidate(s) for their company.  Some of these reasons include:  a key leader or executive has left the company and must be replaced; there is a lack of bench strength in the leadership ranks of the company; a poor performer is dragging down the performance of the management team and must be replaced; a succession plan needs to be implemented in order to move into the future in a seamless manner; the company is growing and new positions are needed to lead and manage the growth; the company is struggling and a turnaround expert is needed and there are many more reasons. 

By: Gary Payne

How many of your New Year's resolutions came in pairs?

Have you, for instance, vowed to get more exercise and eat less this year to become physically fitter? I wouldn't be surprised if many of your other resolutions came in pairs as well: engaging more in acts of service and kindness for spirituality; pursuing new hobbies and carving out more family time for renewal; and reading more and watching less TV for intellectual growth. We choose more than one way to reach our goals because we intuitively understand that the interaction between different approaches will give us a greater chance of success. The same is true with leadership resolutions.

Rob Andrews has been in the executive search industry for 23 years and makes it his business to find the right executives for the job. Houston-based Allen Austin Global Executive Search ranked No. 2 on Houston Business Journal's 2011 Largest Houston-Area Retained Executive Search Firms. The list is ranked by the number of searches completed in 2010, in which Allen Austin had 204.

Continued Momentum and a Shortage of Talent Maintains Senior Executive Search Demand

Third quarter data just released by the Association of Executive Search Consultants (AESC) shows that despite economic turbulence and a quarter-on-quarter reduction in the number of new executive searches started (-8.1%), overall revenue levels have been sustained thereby continuing the momentum of the past two years which has returned the industry close to its all time revenue high of 2008.

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AESC's worldwide senior executive recruitment survey provides a good report card on the value of retained executive search consulting. AESC released its bi-annual report of client satisfaction levels with retained executive search consulting. Overall, respondents endorsed the differentiated value of retained executive search and its contribution as a high end consulting service for the recruitment of top management.

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Frequently asked questions often result from a lack of understanding of the different processes involved as between retained and contingency search. Listed below are the topics explained.

• Type of position
• Methodology
• Engagement Contract
• Nature of the Collaboration
• Fee Payment
• Consultant's Work
• Research: From the long list to a short list
• Consultant's Background
• Additional Investment by the Client
• Ethics: Guarantee, Confidentiality, Off-Limits, Etc.
• Cost vs Risks

To read more about the difference click here

Strength of Demand for Executive Talent Continues

Q2 Data Indicates C-suite Recruiting is on the Rise across all Major Regions – with Particular Strength in New Markets

Second quarter data just released by the global Association of Executive Search Consultants (AESC) revealed a continued rise in senior executive recruitment activity worldwide following the industry’s return to growth since early 2010. The number of new executive search mandates rose +8% year-on-year (from Q2 2010 to Q2 2011), while the quarterly picture saw searches increase by +5.4% (from Q1 2011 to Q2 2011).

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The majority of senior executives have no concerns about making a career move in the second half of 2011, and expect to find opportunities within the Business Development and General Management functions, and in the Energy/Natural Resources and Healthcare/Life Sciences industries. This survey was conducted across the BlueSteps database of senior executives from June 1 – 22 2011, and received 821 responses, including 51% from the Americas, 31% from EMEA and 18% from Asia Pacific.

Senior Executives Interested in Career Moves - Even Without Compensation Increase

BlueSteps survey finds job seekers are using networking and executive recruiters to succeed

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The AESC's latest global executive search industry outlook report revealed that 93% of search consultants surveyed hold a positive to neutral outlook for the business in the second half of 2011, with the greatest optimism coming from consultants in Asia Pacific and the Americas.

The Energy/Natural Resources sector is expected to see the most growth in executive hiring from July to December 2011, followed by Financial Services. On the market outlook, China is predicted to witness the greatest scarcity of talent in the second half of the year, followed by Brazil.

The survey was completed by 196 AESC member consultants worldwide, including 51% from EMEA, 30% from the Americas and 13% from Asia Pacific.

Click Here to view the Report

Houston added 4,100 retail jobs in the past three years, according to an On Numbers study of new data from the U.S. Bureau of Labor Statistics.

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In early 2009, statisticians inside the Googleplex here embarked on a plan code-named Project Oxygen.

Their mission was to devise something far more important to the future of Google Inc. than its next search algorithm or app.

They wanted to build better bosses.

So, as only a data-mining giant like Google can do, it began analyzing performance reviews, feedback surveys and nominations for top-manager awards. They correlated phrases, words, praise and complaints.

Later that year, the 'people analytics' teams at the company produced what might be called the Eight Habits of Highly Effective Google Managers.

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We know that different times and different circumstances call for different leadership skills. So when it comes to managing your own career, how do you prepare yourself to move up? What abilities should young would-be executives focus on developing as they choose companies, functions, and jobs? And what skills should working executives hone as they strive to reach the next level?

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One indicator of the health of the employment picture is how well the executive search business is doing. Expansion often starts at the top. On this week's "Bauer Business Focus," Rob Andrews with "Allen Austin Global Executive Search" talks with Ed Mayberry about the "retained executive search" business.

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If you and your customers understand the value represented in your pricing, you can-and should-charge more for delivering more. An interview on "performance pricing" with researchers Frank Cespedes, Benson P. Shapiro, and Elliot Ross.

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