Executive search revenues fell in the last quarter of 2008, according to the latest Association of Executive Search Consultants (AESC) State of the Executive Search Industry Report.

Worldwide executive search industry revenues plateaued in 2008, growing just 3% annually against a 22% growth rate in 2007. The last quarter of 2008 saw worldwide revenues fall 14% against the same period the previous year, with a 21% decrease in the number of searches started in that period.

Asia Pacific experienced the greatest yearly decrease in the number of search assignments in Q4 2008, falling 22% against the same period in 2007, followed by Europe (-21.3%), North America (-21.1%) and then Central/South America (-16.4%).

Peter Felix, AESC president, told Recruiter: “Q4 2008 is pretty awful reading, particularly in the US, due to the tsunami of the financial sector which hit in October. The top management were caught in the headlights; they panicked and companies sat on their hands in shock and stopped all hiring activities.

“However, we mustn’t forget that ever since the last recession [early 1990s], executive search has boomed. In the past five years the worldwide market had nearly doubled, from $6bn to $11.5bn.

“From the beginning of January, once the shockwaves have subsided, top management have begun to take action. Big corporations have realised that they’ve got to start planning their way out of the downturn and be ready to cope with the new world order of big business.

“The need for excellent management teams to steer organisations through the recession will undoubtedly re-fuel the growth of the profession as the economy rebounds.”

In contrast to decreasing worldwide executive searches and revenues in Q4 2008, the average fee per executive search assignment increased both quarterly and yearly, according to AESC’s report, indicating a very senior level of executive search activity currently taking place within the industry.