Trends in the Corporate Communications and Investor Relations Executive Search Market
Posted on Thursday, January 28, 2010
Trends in the Corporate Communications and Investor Relations Executive Search Market
David Mounde, Managing Director of Deverill Executive Search, gives his view on current and potential future trends in the corporate communications and investor relations search market.
The headline trend observed by the Association of Executive Search Consultants in a recent survey has been a drop in search mandates by 35%, which reflects what we have also observed in the corporate communications and IR market. Following the crises of September and October 2008, there was an instant and kneejerk reaction from corporates, either pulling existing mandates or freezing planned investment in new appointments, mirroring the lack of confidence and financial liquidity in capital markets. This effect has reverberated through to Q1 and into Q2 of 2009.
During this difficult period, a very telling short term trend we have seen is an increased demand from corporates for interim managers to help with company continuity planning, critical issues management and crisis situations. We anticipate that in the medium to longer term, this could evolve into a demand for seasoned and trusted communicators to come on-board to help deliver clear and coherent messaging following these short term crisis situations.
Over recent weeks, we have seen a number of high profile FTSE clients start to revisit their recruitment strategies. They are concentrating on core business critical roles such as media relations, internal communications, public affairs and IR where companies are seeing opportunities in this difficult market to exploit competitor weakness and draw in the best talent.
Candidates who are proactively looking for roles at the moment are finding things tough. We find that many clients want sector specific experts to fill senior communications and IR roles and are reluctant to look beyond that defining criterion. Our house view is that senior management should take a longer term approach to the Communications and IR function. As long as a candidate has the implicit intellectual rigour, aptitude and interest, then there is no reason why they should not cross sectors. We have many case studies where a cross sector move has been extremely successful and one of our house objectives is to work with clients to encourage them to think more laterally about potential appointments.
On the flip side candidates are also being far more selective in the roles they choose to pursue when approached. We attribute this to a more risk averse attitude across the industry. In tougher times, people prefer the security of staying put.
These differing expectations are causing a clear imbalance in the market. On the one hand the corporate wants to get exceptional talent, but feels they should be able to do that at a discount due the broader macro economic climate. Meanwhile the candidate is more discerning about the roles they will consider in the first instance, and far more demanding about the terms on which they would move from their existing positions. This can lead to a “false market” which serves neither party well.
Our view has always been very clear on this issue - we are mandated by the company and will do whatever we can do to get best talent to their organisation. However this will not be done at the expense of a candidate’s career or value in the market. There is a clear and fair value for human capital and all parties need to be respectful of that.
In the short to medium term, we envisage there still to be challenging times ahead for the executive search industry and obviously the broader economy. However on a more positive note, we predict more movement in the coming couple of quarters due to pent up demand. We are seeing a clear recognition among our clients that even through difficult times – or perhaps particularly during such periods - the need to have a high quality and well-developed communications function is a business priority.
We take the view that sustaining long term relationships with clients is paramount to our business. We are also seeing an increase in the number of senior practitioners who have come to us as a sounding board for their team’s abilities as well as their own career counselling.
Corporate Communications and IR have developed beyond all recognition over the last ten years and will develop again beyond all recognition as a consequence of the current downturn. The UK corporate landscape is in rapid transition and some well-loved names have been, and will be, lost. But - forgive the cliché - this is an opportunity as well as a challenge and those who survive will emerge leaner and fitter, if slightly battle hardened. This will be a testing time for all in the industry, either as a practitioner or service provider, but something we will all learn from and grow.
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