This is not a good time to be a headhunter. Ffion Hague, wife of William (remember him?) is one. So is Virginia Bottomley, the former heritage secretary under John Major.
They and other glamorous recruits have helped make headhunting the ‘in thing’ in recent years – the fast way to earn a fortune using little more than a thick skin and a well-thumbed address book. For their fee, headhunters charge between a quarter and a third of a candidate’s ‘package’ in the first year. But as companies start reining in, headhunters are among the first to be lopped off the list.
The evidence is already there. Michael Page, floated in March, duly saw its shares crash on warnings of a slowdown. The Financial Services Authority is investigating whether its prospectus misled investors. Another firm, PSD, expects interim profits to halve due to a ‘material downturn’ in its core markets.
Korn/Ferry International has just laid off 500 staff – about 20% of its workforce. Heidrick & Struggles has laid off 300 employees worldwide, including five UK partners.
What will Britain’s headhunters do with themselves? The best ones – men like Miles Broadbent who finds chief executives for FTSE-100 boardrooms – can afford to sit tight and ride out the economic storm. The Ffion Hagues of this world face less certain prospects.
Worst off are the back-office staff working as researchers in the hope of one day moving up to the front line. Shortlists of candidates are largely down to their efforts. As business dries up, they are among the first to go.
When times are good, headhunters play a valuable role in feeding talent into a dynamic market. This provides rich pickings for those individuals with the chutzpah to make a go of it.
But this will never be an industry that sits comfortably with the stockmarket.
There’s nothing in it for shareholders. If they thought otherwise, they were sadly mistaken.
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