2/26/2020
Take me to a leader - Corporate headhunters are more powerful than ever | Briefing | The Economist
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Fifty years later they have become tightly woven into the fabric of corporate life, and are seen by most multinationals as indispensable. Five giants—Spencer Stuart, Heidrick & Struggles, Russell Reynolds Associates, Egon Zehnder and Korn Ferry—dominate ceo search. This quintet, known as the “Shrek” rms, earned fees of $4.8bn in 2018, 14%more than the year before and 43%more than in 2014, according to Hunt Scanlon Media, a trade publisher. Spencer Stuart places an executive in a leadership role or boardroom 11 times a day, says Ben Williams, its boss. (The Economist Group has recently employed Egon Zehnder and Heidrick & Struggles to ll senior roles, including ceo and chairman.) Interviews with more than 50 insiders suggest that 80-90% of Fortune 250 or ftse 100 companies pay headhunters to nd their ceo , even when the successful candidate is likely to come from within a rm’s own ranks. Among the next tier of companies, perhaps half do. Universities, sports clubs and o cialdom enlist them, too. Last year their clients included English football’s Premier League and the International Paralympic Committee. As the big headhunters have grown bigger, boutique rms have struggled to keep up. Nonetheless, some with deep expertise in speci c industries or corporate functions have thrived, says Nancy Garrison Jenn, who helps multinationals headhunt the right headhunters. True Search, a tech-focused out t, saw its revenues jump by 64% in 2018. Lower down the scale, the rise of online social networks has clobbered recruiters specialising in mere mortals like department heads and middle managers—since, as one puts it, “anyone can buy a computer, get a LinkedIn licence and call themselves a search expert”. The big headhunters have bene ted from the con uence of four forces. First, boards are looking for an ever broader skillset in modern ceo s. Bosses should be physically t to withstand the brutal workload, comfortable dealing with the media and, increasingly, woke. They must grapple with complexity as big rms get bigger and industries converge—giants like Apple or Amazon are at once retailers, consumer-goods companies and tech rms—and with new threats, such as cybercrime.
https://www.economist.com/briefing/2020/02/06/corporate-headhunters-are-more-powerful-than-ever
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