Market Update: The impact of a down market on executive placements.
by Jackson Ross, Partner
Frequently, I am asked how a down market impacts a search firm’s client engagement and the executive-level talent in the market for their next role. The answer is not what most expect, and in many cases, serves as motivation for business leaders. For clarity’s sake, it should be noted that we operate in a pure healthcare environment and work almost exclusively within the investor-backed landscape.
When the tide is out, markets are soft, slow, and scared.
Make no mistake, the tide is out, and just like a beach vacation, things are not as much fun during a low tide. Intertwined economic and geopolitical crises, not to mention stifled debt markets, clearly have a portion of investment capital sitting on the sidelines in wait-and-see mode. But while the net new investment capital is patiently waiting for a turn, the existing assets are looking inward and making strategic moves and investments to prepare for a tide that seems poised to shift in 2024.
Housekeeping
In the world of executive search, this equates to an influx of finance, human resources, and technology engagements. Housekeeping, in a sense. What leadership roles need to be sourced or improved upon so that the business is prepared and ready? How can these down-market moves better equip a CEO to see over the top of the business and not only prepare for a rising tide but also line-of-sight to the barriers that could impact scale?
This work, while rewarding, requires a higher level of client due diligence and an intimate understanding of their current landscape and vision/needs for the future. Inward health checks are never a negative, and in this case, help define the success of the search. We help many clients do just that in a down market.
Preparing for Better Days
Conversely, a soft market creates challenges for high-end operating executives looking for their next challenge. With cash kept close to the vest and human capital being inward-focused, there is a limited market opportunity for CEO, COO, or CRO positions. The individuals who are in the market for these positions must remain patient and focused on businesses that fit their previous experiences and preferred segments. The good news is the volume of opportunity that is ready to execute a search but waiting for the rising tide to kick off. For businesses needing to recruit leaders in the future, the talent pool will be deep with high-end executive operators.
Growing Talent on the Sidelines
In the past two weeks alone, we have observed multiple businesses that cannot afford to wait any longer and are moving forward with CEO and COO roles. This level of activity, coupled with a deep talent pool, will most certainly create healthy client-candidate alignment, and possibly help be a catalyst to a rising tide.
Take the Step
Buffkin / Baker is a partner-led team of executive search professionals who deliver outstanding outcomes by recruiting today’s top talent who will impact your organization. With a process based on deep sector expertise, we have the industry knowledge and understanding needed to provide our clients with qualified leaders.
At Buffkin / Baker, we view our clients as an investment and customize a plan to fit the unique circumstances of private equity firms. Our process is proven and successful in finding the right talent and it is optimized to eliminate the human capital concerns of private equity firms.