Growth of Executive Hiring to Slow, Surveys Indicate
The ExecuNet Recruiter Confidence Index, a monthly survey that gauges how executive search recruiters perceive future hiring activity, dipped two points in November to 59 percent who said they were confident or very confident the market would improve during the next six months. Some 163 executive recruiters participated in the November report for the Norwalk, Connecticut, online job board.
On a monthly basis, there’s been a steady decline from the record numbers posted in November 2006, when 77 percent of the executive recruiters expressed confidence in future hiring.
Despite the near 20 percent dip in confidence compared with a year ago, Mark Anderson, president of ExecuNet, says there’s no cause for alarm, projecting that C-suite hiring will see double-digit growth in 2008—somewhere around 16 percent.
While the current rate of growth is still healthy, some industry recruiters likely are disappointed, Anderson says. The past few years produced growth of 70 percent to 80 percent—a volume that’s unsustainable for the long haul, Anderson says.
He says the confidence index was tempered in November because it reflects a general deceleration in the economy. Growth of the U.S. gross domestic product currently hovers around 2 percent, lower than last year’s 3.5 percent, he explains.
Economists and investment bankers watch the ExecuNet survey closely for its ability to forecast highs and lows in the market well ahead of other economic indicators.
Despite the dip, Anderson is confident there will be a rebound soon.
“I would start worrying if the index fell below 50 percent,” he notes. “That’s when you head for the hills.”
He says the growth will largely depend on the sector of the economy for which an employer is hiring; some will remain aggressive, while others will slow down.
A separate survey conducted by the Association of Executive Search Consultants paints a similar outlook, forecasting growth in executive search activity but not at levels of the past several years. Some 141 HR executives participated in that survey. C-suite hiring is expected grow 15 percent to 20 percent in 2008.
“Respondents are holding a conservative view on overall search activity,” says Peter Felix, president of the New York-based trade organization. “Yet important factors such as changes in demography are causing some employers to look beyond economic concerns and move ahead with hiring activity.”
The ongoing demand for products and services such as energy and health care shield certain types of executive searches from jolts in the economy, Felix says.
“The need is simply too strong to forgo hiring in some areas.”
According to the AESC survey, hiring demand will be strongest in sectors such as finance and accounting, IT technology and engineering.
ExecuNet has slightly different predictions in terms of where the hiring growth will take place. Demand for executives in life sciences and health care, for instance, is expected to grow 12.26 percent. High tech and manufacturing are projected to expand by 10.7 percent and 7 percent, respectively.
Hiring growth for financial services and banking is forecast at 6.61 percent, slower than in past years. Anderson blames the subprime lending crisis for the slowdown.
“There will still be solid growth overall,” Anderson says. “Some industries will fare better than others.”