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State of the Executive Search and Leadership Consulting Profession Executive Talent Special Edition 2025

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State of the Executive Search and Leadership Consulting Profession Executive Talent Special Edition 2025 2019 AESC REPORT For AESC Members Only STATE OF THE EXECUTIVE SEARCH AND LEADERSHIP CONSULTING PROFESSION EXECUTIVE TALENT SPECIAL EDITION 2025 We share exclusive insights from By the 500+ AESC Members, Association of 300+ Clients and Executive Search and Leadership Consultants (AESC) 1300+ Candidates. aesc.org CONTENTS 3 Key Insights at a Glance 4 Introduction 5 The State of Talent in 2025 WHAT CLIENTS NEED TODAY AND IN 2025 6 Top Client Issues Today and in Five Years 7 Top Board Issues Today and in Five Years 8 Attracting & Retaining Talent 9 A Look at Diversity 10 Developing Next Gen Leaders 11 Client Use of Advisory Services 14 Why Clients Select Executive Search Firms 16 Client Metrics for Measuring Success 18 How We Can Better Serve Clients WHAT CANDIDATES WANT 19 Onboarding for Success 20 Innovation as Attractor AESC MEMBER OUTLOOK 21 AESC Members on Top Issues for Clients 22 Growing Advisory Services 23 Supporting Clients with Innovation 23 Supporting Clients with Digital Transformation 24 Opportunities & Challenges for Our Profession 25 Top Business Issues for Search Firms STATE OF THE PROFESSION 27 2018 Regional Revenues 28 2018 Revenues by Industry 29 2018 Revenues by Employee 30 2019 Economic Forecast 31 2019 Economic Forecast by Region 32 2019 Forecast for the Profession 32 2019 Geographic Market Growth Forecast 33 2019 Industry Growth Forecast 33 2019 Function Growth Forecast 34 A View on 2019 from Firm Leaders THE PROFESSION AROUND THE WORLD 38 Regional Market Share 40 Americas 41 Asia Pacific and Middle East 42 Europe and Africa ABOUT OUR STUDY 44 Study Background 2 - AESC Members-Only. Not for external distribution. KEY INSIGHTS AT A GLANCE AESC’s State of the Executive Search and Leadership HERE’S WHAT WE FOUND: Consulting Profession study provides annual insight into how our profession performs year-on-year and Digital transformation continues to be a top how our services continue to evolve to meet client business issue for clients today, presenting demand. We look at the financial performance of new business opportunities for AESC the profession globally and across industries and Members, including ‘digital leadership’ geographies. We also hear from AESC Members advisory services. worldwide on their expectations for the year ahead. For 2019, in our 60th anniversary year, we have Developing next generation leaders and added special insight from both clients and creating and maintaining cultures of candidates to this year’s report. Revisiting the innovation top the list of priorities for framework of AESC’s Executive Talent 2020 report clients by 2025. from 2016, we have surveyed clients worldwide three years later to better understand their top Clients view their organization’s brand or business challenges today and by 2025, how they employer value proposition as the greatest currently use external advisors and how they challenge to attracting the right talent. plan to use them in the future, as well as how our profession can better serve them. Clients view being able to provide enough growth or development as the greatest Our findings this year show that digital challenge to retaining the right talent. transformation tops the agenda of client organizations worldwide. Digital is driving demand M&A, long-term value creation, and board for both agile leaders and agile organizations, recruitment top the list of priorities for increasing focus on developing next generation boards of directors by 2025. leaders, and fueling a critical need for diversity in the C-Suite and at Board level. Nearly a third of clients expect their work Clients are also revisiting their business models and with executive search firms to grow by racing to tap into disruptive technologies to better 2025, but the same percentage expect serve their customers, and in the process, expand growth of their own in-house recruitment their portfolios of products and services. These teams. forces combined place a tremendous new demand on talent. In The Conference Board’s C-Suite Business leaders worldwide rate the Challenge 2019: The Future-Ready Organization, diversity within their organization’s on which AESC partnered, CEOs around the world executive ranks fair at best, but better by revealed ‘attraction and retention of top talent’ as those in organizations that publicly report their number one business issue. their diversity data. Our study echoes The Conference Board’s findings. Clients cite delivering diverse candidates as The most critical issues revealed by clients in our the number one way that executive search report all stem back to the right leaders leading in firms can better serve them. the right way. State of the Executive Search and Leadership Consulting Profession - Special Executive Talent 2025 Edition - 3 INTRODUCTION As Executive Search and Leadership Consulting Revenues They are also looking to the next generation of leaders for Exceed $15 Billion USD, Digital Drives New Demand for Top the talent they need. Organizations risk losing institutional Talent knowledge and years of management experience as the Our State of the Executive Search and Leadership Consulting Baby Boom generation exits the workforce in many markets Profession data reveals that 2018 brought the best growth around the world. Developing next gen leaders has come for the profession since the Global Recession. Executive much more in focus as today’s C-Suite realizes they will need search experienced 12% growth by year’s end and leadership to expedite the growth of their successors. consulting grew by 12.8%. We estimate that global revenues for the executive search and leadership consulting All of these key business issues are talent issues. As a result, profession, across all lines of business, has now climbed to there are win-win opportunities for increased partnership $15.6B USD. between executive talent advisors and their clients. Digital is driving critical demand for new talent, and in the In this report, we share with you, our members, what we process, a new golden era for executive search, while fueling heard from clients about their needs today and by 2025, emerging opportunities for new advisory services. With all what candidates want, and the state of our profession. We the focus on the disruptive technologies of Industry 4.0 in offer insights that can help you strengthen your relationships recent years, we find that there is an even more voracious with clients and candidates and grow your businesses. need for talent in a Business 4.0 environment. Business leaders understand that their organizations must be increasingly agile in order to seize the opportunities of digital and thrive in a rapid and often uncertain global business Karen Greenbaum climate. They seek innovation and know that diverse talent AESC President and CEO is critical to bringing new perspectives and fresh thinking to their organizations, and they are looking to executive search firms to deliver it. REVENUES CLIMB TO $15.6 BILLION Chart A: Estimated worldwide executive search and leadership consulting revenues 1989 – 2018 4 - AESC Members-Only. Not for external distribution. THE STATE OF EXECUTIVE TALENTIN2025? Digital drives agility, innovation and diversity KEY ISSUE FOR CLIENTS TODAY KEY ISSUE FOR CLIENTS BY 2025 DIGITAL DEVELOPING CREATING/MAINTAINING TRANSFORMATION NEXT GEN LEADERS CULTURES OF INNOVATION KEY ISSUE FOR CLIENTS ARE TALENT ISSUES 73% of clients plan to provide Attraction and retention of top talent ranked #1 business focused development to issue by CEOs worldwide. next gen leaders in the next five years 43% of CEOs cite lack of talent and skills as a barrier to future innovation, making it the biggest obstacle to overcome by 2020. 74% C-Suite Challenge™ 2019: The Future-Ready Organization, of clients by 2025 expect The Conference Board to seek the expertise of external advisors to plan for leadership succession FUTURE CLIENT WHERE CLIENTS EXPECT WHERE AESC MEMBERS 71% CHALLENGES - 2025 TO WORK WITH EXTERNAL EXPECT GROWTH IN of clients are open • Developing next gen ADVISORS LEADERSHIP ADVISORY to working with an leaders • Succession planning SERVICES executive search firm • Creating/maintaining a • Leadership • Digital leadership in the next five years culture of innovation effectiveness • Board assessment & for guidance on digital • Actualizing digital • Organizational advisory leadership transformation effectiveness • Leadership development State of the Executive Search and Leadership Consulting Profession - Special Executive Talent 2025 Edition - 5 WHAT CLIENTS NEED TODAY AND IN 2025 or our study, we sought to develop 4. Resistance to change a deeper understanding of the 5. Lack of definition for what a top business issues that clients are transformation means F grappling with today and what they expect to be challenged by in five years. We Businesses often struggle with the surveyed more than 300 business leaders organizational agility (#2 issue for clients around the world to gain insight on their top today) required to launch new and innovative challenges, where they see opportunities products and services (#3 issue) successfully and their expectations in developing in today’s competitive, rapidly changing relationships with executive search and marketplace. They are locked into outdated leadership consulting firms. processes that no longer work but which can We started by asking about key business be difficult to break without a major change issues and how those issues inform their in culture. Change management must be use of external advisors. Clients identified driven by the right leaders and embraced ‘actualizing digital transformation’ at the across the enterprise, which is no easy feat. top of the list of today’s issues. Industry Leaders who can inspire change and create 4.0 technologies have created a ‘Business and maintain a culture of innovation (#4 issue 4.0 environment’ which is fundamentally for clients today and a top issue for clients different than that of the past. The new in five years) are rare and there is fierce world of global business requires much more competition to find them.
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