According to most of the national press, the Great Recession of 2008 has been followed by the Great Jobless Recovery of 2011. No one seems to know when we can expect job growth significant enough to make a major dent in the current unemployment numbers, but most all agree that it will be a while before we see the unemployment rate dip to pre-recession levels. If you’re up for a particularly sobering read, check out McKinsey’s thoughts on the topic.
However, based on our experience through 2011, all the news isn’t necessarily gloomy. We’ve seen an uptick in search activity from the beginning of 2010 through to the midpoint of this year and our numbers are by no means unique. The Association for Executive Search Consultants (AESC) saw a dramatic increase in search activity in 2010, reporting a 28.5 percent increase from 2009.
Obviously, that’s coming off one of the worst years in this industry’s history but still ranks 2010 as executive search’s third best year… ever. AESC’s reports from the First Quarter of this year were equally promising. As to our particular experience, SSG’s search activity is up over 50 percent in the first six months of 2011 vs. the same period last year.
Here are some encouraging signs we have observed over the past six months:
- An increased level of competition for talent – The candidates we are pursuing for our clients are telling us that calls from executive recruiters and potential employers are up significantly from the past few years, perhaps signaling that the recent détente in the War for Talent has ended.
- An increase in newly created positions – For the first time since the beginning of 2008, we are being asked to find talent for newly created roles in a big way. From 2008 to 2009 most of our work focused on replacing executives who had left their companies. Now, it appears that our clients are focusing their efforts on more growth-related roles as well, adding positions to the org chart focused on revenue generation and new business development.
- An increased receptivity by executives to considering a job change – Prying high performing executives out of their current positions was an exceedingly difficult task at the depths of the slowdown. The perceived risk of making a change was simply too high for many executives to stomach when imagining the length of time a job search might take if things didn’t work out with a new employer. Through the first part of 2011, while still a bit skittish, the thought of making a career-enhancing move is much more palatable to top performers.
The implications on the last point for you as an employer are fairly clear. As business conditions continue to improve, so will an increase in voluntary turnover at the senior executive level. Your star performers are now “in play” and we expect this to increase through the second half of 2011 barring any significant setbacks for the economy. We are encouraging our clients to place a stronger emphasis on engaging their prized talent before they begin to actively seek career development opportunities elsewhere.
My point here is not to be Pollyanna regarding the fragile state of the recovery. There are still real challenges ahead. A Greek default, apprehension over disruptions in energy supply, and continued stagnation in consumer demand and confidence could all send us into a double dip that would further depress the already tepid job creation we have seen in recent months. However, companies are sitting on a lot of cash and, while continuing to emphasize the importance of driving efficiency into their businesses, they are also looking to make investments in future growth.
Overall, we give the improvement in the senior executive employment market a solid B for the first six months of the year; it would most likely have been a B+ if not for the slow down in growth in the last few months. We are encouraged that this positive trend will continue for the rest of 2011, again barring any major shocks to the system.