|The Business Times Weekend, January 9 & 10 2010 (Saturday & Sunday)
Interview with Lim Chye Lian, Managing Director & Founder, Executive Talent International Pte Ltd
XECUTIVE recruitment is a leading indicator for the global economy – and indications are promising as we enter a new decade. The last quarter of 2008 and the first half of 2009 were very slow in executive search, across all sectors and geographic regions, almost without exception. But in June and July of 2009 we saw a fairly pronounced renewal of activity that has been maintained since then.
Our partner firms are seeing higher levels of search activity in virtually every one of the cities where we operate. Executive hiring is certainly not uniform in every region, or in every business sector, but the trend is clear. Our business has quickened substantially from the pace seen in the first half of the year and we expect continued improvement in 2010.
The recovery appears strongest in Asia-Pacific, where it's evident that the primary engine of growth is the People's Republic of China. That engine slowed briefly in the first half of last year but then regained its pace in the second half.
Projected GDP growth is on an upward curve across most of the Asia-Pacific region, with the exception of Japan, and we believe China's and India's demand for raw materials will provide a stable base for growth in the region.
Search-industry figures compiled by the Association of Executive Search Consultants show that we are not alone in seeing companies return to hiring senior executives. Activity levels across the search industry increased 32 per cent in Asia-Pacific in the third quarter of 2009, over Q2 2009. European activity increased 11 per cent, quarter-on-quarter, while South and Central America increased 6 per cent and North America rose by 2.4 per cent.
After its worst recession in 60 years, Europe is showing credible signs of recovery, with exports up 2.9 per cent in Q3 despite the drag imposed by a strong euro. Unemployment is still a concern and the recovery is still reliant on government stimulus. But investor confidence is up for the fourth straight month, as we have ended 2009.
In the United States, consumer confidence has been shaken by unemployment, personal debt levels and underperforming retirement plans. But the recent consistent flow of investment back into equity markets can be expected to lend support to all other indicators. Executive search markets as diverse as Washington, Houston and even Detroit are reporting markedly better activity in the second half of 2009 and an improving outlook for 2010.
It's important to bear in mind that 2008 was a banner year for the search industry, like many others, and no one is expecting 2010 to rise to that level. But, certainly, we are seeing companies assessing their executive capacities and finding that they need new talent to deliver on their plans for next year and beyond.
Companies are also increasingly finding their hiring hand forced by demographics. Across Europe and North America, in particular, the baby boom generation is entering retirement. To be sure, this impact has been delayed to some degree by the recession but the simplest mathematics tells us it won't be deferred much longer. Estimates are that several tens of millions of jobs will be vacated in the decade ahead and that millions of those vacancies will be in senior management. Some companies have planned for this but most have less than total solutions in this area.
As we emerge from recession, talk of a return to the talent war may seem premature. But demographics tell us the downturn was never really anything more than a temporary lull.
For those of us in Asia, the interesting fact is that it will be statistically impossible for Europe and North America to replace all their retiring managers by internal recruitment. For a generation of Asian talent who have attended Western business schools, gained international management skills and become fluent in English, we are entering what could be the first year in a decade of golden global opportunity.