Last week’s jobs report sent shockwaves through Wall Street, marking one of the worst weeks for the stock market since the start of the year. While overall hiring appears to be slowing down, there’s a surprising counter-trend brewing at the executive level. According to data from headhunting firm Korn Ferry, executive search activity is on the rise.
In its latest earnings call, Korn Ferry reported a 6% increase in revenue from its executive search arm in North America compared to the same period last year. This segment accounted for a significant 31% of the company’s revenue during the quarter. The trend is echoed globally, with a 3% increase in executive search revenue across all territories.
Korn Ferry CEO Gary Burnison attributes this surge to an unprecedented wave of retirements. “The level of work we’re doing these days in executive search is probably the highest I’ve seen,” he said, adding that many of these searches are due to job succession.
This year, the U.S. is experiencing what observers call “peak 65,” a period where the number of workers reaching the retirement age of 65 is at an all-time high. The Alliance for Lifetime Income reports that an average of 11,000 Americans enter retirement age daily, and this trend is projected to continue, resulting in an average of 4.1 million new retirees annually through 2027.
This demographic shift is driving one of the largest executive renewal trends in U.S. history, creating a significant demand for qualified successors. This trend stands in stark contrast to overall unemployment data, which has shown consistent increases since March, with a slight decrease between July and August.
“Over the next two to three years, the United States is probably going to lose 4 million, 5 million workers a year from the last of the baby boom retirements,” Burnison said.
The high demand for executive talent is benefiting Korn Ferry, as evidenced by its recent earnings performance. The firm exceeded analyst expectations for the latest quarter, reporting sales of $682.761 million, surpassing the consensus estimate of $663.937 million by 2.84%.
While the recent jobs report highlighted overall weakness in the job market, with the U.S. economy adding only 142,000 nonfarm payrolls in August (below economist expectations of 160,000), the executive hiring surge is a positive development.
The recent jobs data has also prompted traders to anticipate a rate cut in the upcoming FOMC meeting, with many seeing it as “the moment we’ve all been waiting for.”
Despite the mixed signals from the jobs market, Treasury Secretary Janet Yellen expressed confidence in the economy’s resilience. “We’re seeing less frenzy in terms of hiring and job openings, but we’re not seeing meaningful layoffs,” Yellen said at a recent event.
While overall hiring may be slowing, the executive search market is booming, driven by a significant wave of baby boomer retirements. This trend is creating opportunities for qualified individuals seeking executive-level positions, while also presenting challenges for companies as they grapple with finding successors for critical leadership roles.
