(Bloomberg) — Executives looking for new challenges after verging on burnout during the pandemic are helping to drive business at headhunting firm Korn Ferry, its CEO Gary Burnison said.
The talent turnover is fueling a “significant uptick” in demand for Korn Ferry’s executive search and third-party recruitment services, Burnison said, adding that the aging profile in boardrooms would underpin long-term growth.
“So you look at those people that led organizations through a very, very difficult time in humanity, you probably have a lot of people saying: ‘Do I want something else in life?’,” Burnison said on the firm’s quarterly earnings call Tuesday.
Korn Ferry’s executive search business, its largest sales contributor, rose 2.6%, its strongest gain in 2 1/2 years. Its recruitment process outsourcing segment grew 4.3%. Strength in these segments offset a nearly 5% contraction in its consulting business, helping spur a consensus-beating 11% gain in adjusted EPS for the quarter.
Increasingly cost-conscious companies are commissioning fewer “discretionary engagements” such as training development, said Burnison. Meanwhile, the firm is shifting focus to consulting projects that “take longer to implement” and convert to revenue, he added.
US job openings rose in January, though the figures lag more recent data that showed higher unemployment last month.
Macroeconomic uncertainty aside, Burnison sees demand for the firm’s services growing as major economies confront the realities of a rapidly aging labor pool and companies are prompted to reskill and retain workers.
“The hard, cold truth is that there’s going to be less people coming into the workforce,” he said, estimating that US corporations will see about four million to five million executives turning 65 every year. “That creates opportunity for us,” he said.
Korn Ferry shares closed 7.6% higher Tuesday.
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