Headhunters are aiming ever higher

Global executive-search firms focused on recruiting for top management positions in China in the third quarter, as the world's second-largest economy continued to face a severe manager shortage, according to a report from an industry group.

"Clearly there is high demand for talent in Asia. This reflects good economic indicators, but possibly also the inability of the education system to produce the right kind of people,"said Patrick Rooney, Asia Pacific managing director for the Association of Executive Search Consultants, which released the report on Wednesday.

The results reflected no impact of the slowing economy in China, Rooney said, adding: "Asia-Pacific results generally held up well".

China's managerial shortage stems from a lack of Mandarin and English-speaking professionals who are familiar with local culture and can relocate quickly, the AESC has said.

An AESC survey last month showed top executives in the Asia-Pacific region were paid the world's highest base salaries, partly due to employers trying to retain talent amid the talent shortage.

The report also showed Asia-Pacific region had the smallest decline among surveyed regions in the average number of searches it conducted in the quarter. Searches fell 5.9 percent from a year earlier, compared with decreases of 13.3 percent in North America, 7.5 percent in Europe, the Middle East and Africa, and 24.6 percent in Central/South America.

Between the third and second quarters, search volume fell 3.5 percent in Asia Pacific, 6.4 percent in North America, 6.5 percent in EMEA and 15 percent in Central/South America.

Rooney saw the results as indicating "a global trend towards large firms being more selective in their use of executive search"and using search processes for senior or hard-to-fill roles. "This trend is also seen in Asia but is partly offset by continuing economic growth in the region", the official said.

In terms of market share, the year-over-year results for Asia-Pacific rose just 1 percent. Rooney said that result charts the "slow but steady rise of the relative strength of the Asia Pacific region compared to other parts of the globe". He said he expected the trend to continue. "We expect the need for search will continue to rise as Asia becomes home to an increasing number of global firms and the global talent shortage begins to bite", he said.

Financial services and consumer products increased their share of searches slightly while the industrial and technology sectors saw a minor drop. Life sciences and healthcare saw no change in market position.

In the latest quarter, the average fee per executive search assignment rose 6.4 percent from the same period a year earlier and 4.4 percent from the second quarter, the AESC said. That result contrasted with an 11.2 percent drop in new executive search starts from a year earlier and a 6.6 percent decrease from the prior quarter. Despite the search-volume decline, revenue rose 11.7 percent from a year earlier but remained flat compared with the second quarter.

The report is based on a sample of AESC member search firms representing the activity of 1,430 executive search consultants worldwide.

Average revenue in the third quarter rose 11.7 percent from a year ago and just 0.2 percent from the second quarter. Revenue per consultant was up 4.9 percent on average from the year-ago period but dropped 1.5 percent from the prior quarter.

Overall, client demand is "focused on higher level, quality searches as opposed to the volume associated with middle to senior recruiting", AESC President Peter Felix wrote.

The executive search industry generated revenue of $9.74 billion last year, AESC says.

michaelbarris@chinadailyusa.com