Today, we know and accept the retained executive search and recruiting field as an important and vital part of the business world. In fact, it’s a global consulting industry with annual revenues of more than $10 billion.
But many people do not know that the field was born when Thorndike Deland formulated the concept of executive search back in 1926. He founded the first executive search firm — which was once located on Broadway in New York, N.Y.
Executive search and recruiting really started to take off in the post-World War II years as a by-product of management consulting. The emergence and development of the field followed the expansion and globalization of business and markets, and a new type of organization that embraced modern management methods.
Central to these new management methods was the idea of meritocracy. Previously, companies filled positions through the old boys network and through a cultural commitment to lifelong employment. But in the post-war years when business was booming, organizations were expanding globally and competition for market share and talent was growing fiercer, companies realized they needed to start looking outside their staid networks.
Often the best solution to a management problem is the right person. Edwin G. Booz
The executive search field benefited from the growing realization that companies could achieve competitive edge by hiring talented, experienced executives from outside their ranks who could inject new and innovative ideas into their cultures.
The retained executive search field started largely in the U.S.A. in the 1940s and 50s, and quickly expanded to Europe, especially the U.K., but it always had a global orientation. Many of the early firms were begun by veterans of management consultant companies like McKinsey & Company and Booz, Allen & Hamilton. They took with them the professional tenets of management consulting and laid the foundation for a new consulting discipline.
The first Canadian retained executive search firm was Caldwell Partners, founded by C. Douglas Caldwell in 1970.
From the 1970s onward, executive search expanded around the globe, through Europe and to Asia and Latin America as the trend toward globalization continued, mergers and acquisitions activity heated up and corporate loyalty eroded when executives realized they could often achieve more rapid career growth by moving to a new company.
Weathering recessions and business cycles, executive search is now employed by a very wide range of organizations, including academic institutions, government agencies and non-profit organizations, to fill key possessions.
Most recently, the executive search field has boomed due to the way in which globalization has transformed the world economy coupled with demographic shifts such as baby boomer retirement and increasing demand from emerging markets. Some feel we are in the midst of a War for Talent.
The future looks bright for retained executive search. Phelps Group is proud to have contributed to the development of the field in Canada over the past 27 years, and we’re delighted to be extremely well-positioned to take part in the future growth.
Note: Information for this article came from the AESC — Executive Search at 50.
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