Executive Hiring Still Strong in ’84
Executive recruitmentby companies in the western United States continued strong last year, accounting for more than one-third of all executive hiring in the nation for the second year in a row, according to an index compiled quarterly by the executive search firm of Korn/Ferry International. The survey covers Korn/Ferry’s 750 domestic clients.
In the West, hiring of senior executives--those with base annual salaries of $75,000 and up--remained at 35% of the national total. Demand dipped a point to 10% in the Midwest, dropped a point to 35% in the East, increased two points to 11% in the Southwest and remained unchanged at 9% in the Southeast.
Nationally, the hiring index rose 27% in 1984, the highest increase in six years, and could rise another 22% this year, Chairman Lester B. Korn said in releasing the latest index, the 52nd published by the firm. It turned up no sign of a coming recession, as has been forecast by some economists, Korn said.
Generally, he explained, a marked increase in the hiring of finance officers and reduced recruiting of general management, manufacturing and production executives indicate a recession. Today, he added, “demand for general managers is at the highest point in at least eight years, while hiring of manufacturing executives has remained stable and recruiting of finance officers has dropped.
“Companies have not stopped planning for expansion. In many industries, such as consumer products, retailing and health care, demand for senior marketing executives remains strong because companies want to expand market share or enter new markets,” Korn said.
On the other hand, companies appear to be re-evaluating their deployment of corporate resources and demanding top performances from their managers, he said. “Mediocre performers are being replaced, starting at the very top, and there is plenty of belt tightening at the middle-management level.”
The company found that demand for executives was particularly strong in the first half of the year, with hiring up a record 50%. Recruiting tapered off in the third quarter and flattened out by year-end--but not enough to keep 1984 from being the strongest year in executive hiring since 1978, Korn said.
New chief executives accounted for 12% of the total hirings in this area, up four percentage points from the year before. The pace picked up in the second half, averaging about 15%.
“Companies are looking for strong leadership and are willing to replace CEOs who are performing marginally,” Korn said. “This is the highest demand for chief executive officers in at least eight years.”
Demand for general managers led all other executive functions--33% of total hiring, up from 31% in 1983. “Hiring of these executives has risen as companies prepare either for expansion or retrenching,” he said. “The emphasis is on leadership to accommodate economic turnarounds and take advantage of opportunities to improve earnings.”
Hiring of finance officers dropped from 19% in 1983 to 15% in 1984, a trend that usually accompanies an improving economy, Korn said.
