Search-Consult Magazine Excerpt, Issue 17, Fall 2003 Executive Search in New York: The Phoenix Soars
New York embodies the Corporate Capital of the world and as such, mirrors the cultural and business diversity, national and international expertise, as well as the creativity and sense of spirited competition that abounds in this dynamic and powerful city. At this moment, New York's economy is depicting mixed signals -- on the one hand, the economy shows signs of recovery as stock markets are rising and companies attempt to shake off the long-term effects of a prolonged recession. Nevertheless, with the U.S. experiencing its 8th straight quarter of growth without job creation, this becomes an interesting challenge for companies to overcome. As a result, executive search becomes instrumental, helping companies adapt an prepare them for growth.
Search-Consult interviewed Hayes Reilly among 11 consultants from large global firms and small boutiques, to see what their clients' main concerns are and how search firms are adapting to the ever-changing market conditions. Here are excerpts from Hayes Reilly's interview. WINTER ARRIVES All the consultants described how September 11th brought the economy to a halt. As a result, executive search froze for about 6 months as businesses and people dealt with the shock and adapted to life after 9/11. Hayes Reilly, President of Hayes Reilly Associates, comments on the psychological impact: the closer you were to ground zero, the more it affected your business. ON THE PATH TO RECOVERY After three years of cutting costs and massive layoffs, businesses are beginning to see the light at the end of the tunnel. Businesses are declaring an increase in revenues, but overall, companies are still running incredibly lean and are working hard to make sure they don't make or buy more than they absolutely need. Hayes Reilly comments: "The cost of a turnover or having a bad hire is just too great right now. The Hay Group, a consulting firm, recently conducted a survey, which stated that the cost of turnover to a company could be as high as 150% of the exiting person's salary. Another study, conducted by The Corporate Leadership Council, has calculated that 50% of Director level and above professionals leave, or are being asked to leave, a company within the first 12 months." Therefore companies are turning to search firms to help them minimize these odds. CHOOSING THE RIGHT PHOENIX Under the present conditions, the right search firm is instrumental for a company's continued success. Moreso when you take into consideration that the volume of search has gone down and companies are becoming more selective in the way they use search. Hayes Reilly comments: "Today, companies want to hire firms that have a proven process for success." During the search process the hiring managers and human resource professionals overseeing the search want to make sure the companies are getting quality and value for their money. STRATEGIC PARTNERSHIPS All the consultants noted the importance of ownership and accountability in creating long-term relationships with clients. For Hayes Reilly, the way a search firm manages its off-limits is also fundamental. FEEDING THE PHOENIX Some sectors of Financial Services are recovering and others are expanding, but many of the firms interviewed remarked that there was not much movement coming from Wall Street yet. Hayes Reilly explains: "Corporate Governance, Board and Homeland Security searches are booming. With all the unethical and illegal activities of late, corporate governance is being redefined. As a result, the services offered by accounting firms, law firms, search firms, and consultancies are in demand as companies try to clean house."