Rapid Growth and Increase in M&A Expected in Recruitment Sector by 2025
Amidst the backdrop of a challenging economic climate, the executive search industry saw steady growth and resilience in 2024, setting the stage for a robust future. Hunt Scanlon’s latest report delved into the high-end recruitment landscape, revealing a surge in growth and merger and acquisition (M&A) activities by the year 2030.
Last year, billions of dollars were injected into the recruitment sector, both in the U.S. and globally, showcasing the industry’s resilience in the face of economic uncertainties. Evan Berta, Hunt Scanlon’s chief market analyst, highlighted the industry’s stability despite turbulent economic conditions, with growth rates peaking at six percent.
In the U.S. and the Americas, the fee revenue at the top 50 executive search firms hit $6.041 billion, with a significant portion of firms reporting positive growth and some even achieving double-digit gains. Notably, Russell Reynolds Associates recorded a remarkable growth rate of 10.8 percent in the Americas, securing a spot among the top five SHREK firms globally.
The recruitment sector’s growth trajectory has been fueled by strategic acquisitions, diversified service offerings, and the integration of AI-driven tools to enhance operational efficiencies and gain a competitive advantage. The demand for interim executive hiring, leadership assessment, and consulting services witnessed a notable uptick as businesses sought agile talent solutions to navigate the evolving workforce landscape.
Market consolidation emerged as a key driver of revenue growth for search firms, with many actively exploring M&A opportunities to scale niche verticals swiftly and expand into new markets and service lines. As organizations adapt to changing market dynamics, acquisitions have emerged as a potent strategy for sustained growth and market expansion.
Recruiting specialists focusing on private equity, technology, healthcare, and financial services sectors experienced significant growth in 2024. The private equity industry, in particular, has emerged as a major consumer of executive search services, requiring top-tier talent to drive deal flow, optimize portfolio performance, and foster business scalability.
The technology sector’s rapid evolution necessitated the hiring of leaders capable of steering digital transformation, AI integration, and cybersecurity advancements. Similarly, the healthcare and life sciences field witnessed growth fueled by innovation in biotech, pharmaceuticals, and healthcare delivery, highlighting the need for specialized leadership to navigate regulatory complexities and technological advancements.
Financial services, perennially, remained a frontrunner in engaging search firms to secure skill-specific leadership amidst economic fluctuations, regulatory changes, and the growing demand for specialized financial expertise. NU Advisory Partners emerged as the fastest-growing search firm in 2024, attributing its success to a niche focus on high-growth sectors and innovative industries, particularly within the private equity realm.
The buoyancy in the recruitment sector was also fueled by PierceGray’s Matt Hamlin, who underscored three primary growth drivers: client expansion, flexibility across functions, and renewed energy from long-hold portfolio companies seeking upgraded functional leaders that align with strategic shifts. Landing Point, a newcomer to the Hunt Scanlon Top 50 roster, excelled in financial services searches, leveraging a relationship-driven model and AI-powered tools for success.
Overall, the executive search industry is poised for an upward trajectory, with M&A activities, strategic partnerships, and an emphasis on specialized talent acquisition shaping its future landscape. As organizations embrace technological advancements and pivot towards agile talent solutions, the recruitment industry is primed for sustained growth and evolution in the coming years.