Peter: Thanks, Keiva. The Barrett Group (we call it TBG) helps executives in the US, Canada, Europe, the UK, and the Middle East with a smattering in the rest of the world. Our core market is about 9 million executives, essentially from the Vice President title on up, which grew by about 1% in the past 12 months’ year review. But growth is only one side of the coin because fully 450,000 executives changed jobs in that period. Add in the Director level, and that number swells to 577,000. That is a lot of opportunity. Naturally, some segments are growing rapidly while others are shrinking, so we help our clients reposition their talents to the growing industries and roles as part of their career change programs.
Marion: The executive market is always in flux, particularly the unpublished market where about 75% of our clients land. Overall, The Middle East grew the fastest, while the EU, UK, US and Canada all grew more slowly, however, as Peter mentioned, there is a lot going on at the industry level, too. IT comes in third place in terms of total executives, but it shows a very strong hiring demand according to LinkedIn, as do Management Consulting, Hospitals & Health Care, and Higher Education. We also look at the female executive share, of course, and there the bright spots include Non-profit Organization Management, Health, Wellness & Fitness, and Civic & Social Organization Management.
As far as specializations are concerned, generally speaking there is very strong demand for Finance, Budgeting, and Analytical Skills, as well as Business Planning, Start-ups, Risk Management, and Health Care Management.
Peter: Well, we were all relatively lucky, Keiva, as the veritable soft landing seems entirely possible now. US GDP grew at a robust annualized rate of over 5% in Q3, for example, while inflation is falling steadily. Still, in the US, the Conference Board predicts a mild recession in the first half of 2024 as inflation continues to fall but consumers exhaust excess pandemic savings and demand weakens. Employment is likely to remain fairly tight though, so that economic growth should pick up in the second half again as interest rates begin to ease.
In Europe, growth was quite slow in 2023, weighed down by rising interest rates but also by weakness in export markets, particularly in Germany. The true costs of geopolitically driven near-shoring of production and achieving significant decarbonization are only now coming into focus across the continent. Nevertheless, growth should return to the 1.5% rate by 2025 as inflation pressures ease and borrowing costs begin to sink.
The IMF says that economic growth slowed to 2% in the Middle East in 2023 due to oil production cuts, lower export demand, inflation effects, interest rate increases, and restrained consumer spending. As these factors recede, GDP growth is expected to pick up in 2024 toward 3.5%.
Marion: As I mentioned, if you look only at positions offered through executive recruiters, some do perceive a softening demand. Certainly, Private Equity and Venture Capital, for example, saw a significant decline in investment in 2023 and this affected their recruiting demand. However, TBG clients learn how to tap the whole market, and there we saw robust client landings pretty much all year long.
Industrially, our clients paralleled the broader market landing executive roles in the Financial Services, IT, Manufacturing, and Health Care areas, but also in other sectors such as Advertising and Media, Leisure and Travel, Management Consulting, and Energy as well as many other segments. C-level positions, Vice Presidents, and Heads of Function comprised about half of our client landings. The Director level, Senior Manager, and other roles that are difficult to categorize in a normal hierarchy such as “Professor” constituted the remainder.
Peter: At a high level, LinkedIn rated hiring demand as very high in New York, London, Paris, Chicago, Munich, the Randstad, the UAE, Saudi Arabia, San Francisco, Boston, Stockholm, Berlin, Dallas, and Frankfurt—just to name a few of the top locations.
Although this varies by industry, generally speaking the titles of Managing Director, CFO, and Vice President seem to have been most in demand in the US, whereas, “Head” plays an outsized role in the EU and UK, as it does in the Middle East, though CEO was also much in demand in this latter market.
Peter: As you know, because we were very early adopters of a fully remote approach to providing our service already in 2017, we had to build a lot of our systems and automation ourselves, and while overall these systems have served our clients and staff well, we launched the “One Roof” project in late 2022 to bring as many of those systems in under one integrating software program as possible.
The objective is to offer a more seamless and efficient user experience for our clients and staff. In my opinion, we made tremendous progress in this respect in 2023 because we migrated the front half of the business fully onto the One Roof platform, and we will see even more benefits in 2024 as we move the back half over, too.
Marion: Let me add, too, that our landed clients would most likely confirm that. See the three score success studies on our website, for example, where time and time again clients refer to our integrated process, research support, and expert consulting advice as being key to achieving their targeted positions.
We have also studied the prognosis for remote work, and although there is currently a bit of a resurgence in the back-to-the-office trend, longer term, most pundits and projections see only a growing importance for remote work. In fact, we often hear from clients that the reason they want to change career tracks, industry, or roles is so they can continue to work virtually or begin to work from home.
Peter: Certainly, I’ve been CEO now for more than six years and although we have achieved a lot, it is time for fresh eyes, an open mind, and new energy to take us to the next level. In that regard, Marion Engelke has done a remarkable job as Vice President of Marketing for the past few years and demonstrated that she has exactly those qualities, as well as the trust and support of the organization. So, it is our pleasure to confirm her appointment as CEO effective January 1, 2024.
Marion: But don’t sell yourself short, Peter. You helped TBG triple the number of executives we help each year, expand to two new continents, automate countless systems and subsystems, provide an enormous array of unique information and editorial content, build a cohesive culture, and return a 40-fold return on equity invested. You will be a tough act to follow. Fortunately, in your new role as Chairman of the Advisory Board, we know you will continue to contribute, and we are counting on it.
Marion: You’re right, of course, but aspiration feels close to the surface in our culture, too. Our clients are high-powered executives, and they expect the highly professional service we deliver, but we cannot rest on our laurels. We need to constantly keep our eyes and ears open for further improvements. We have already laid plans to cautiously add artificial intelligence to this mix in 2024—specifically as a means of reducing labor for our clients and staff—because our aspiration remains to offer an industry-leading user experience and results.
I have heard you use the phrase “High Tech” and “High Touch”, Peter, to describe this dichotomy that allows us to remain very personal and human even as we take full advantage of automation. That continues to be our mantra.
Marion: Our unique Industry Updates already provide a periodic window into how specific segments of the executive market are evolving. Information Technology, for example, or Management Consulting, Construction and Real Estate, Manufacturing, Financial Services… The list of these updates goes on and, of course, we also consolidate this information to provide the kind of compact intelligence on the overall executive market Peter referred to earlier.
Where is it going? We hear some concern from executive recruiters about 2024 and the possibility of layoffs in some sectors and slower hiring in others. This will likely happen, but that is the benefit of our approach. We are not experts in any specific sector. We work across essentially all industry verticals because it is our methodology, process, and associates that, coupled with a lot of hard work performed by the clients, deliver our incredible effectiveness, regardless of the economic cycle.
In part this is because we teach clients to access the ever-active unpublished market—three-quarters of our clients land positions that were never advertised! —in addition to the published and recruiter markets. Our clients simply have a number of advantages in the executive marketplace over those attempting to find that next position on their own.
We are seeing more and more reports, too, about how AI may significantly impact productivity even in service industries in part while employed as a hybrid tool to support human employees and make them more productive. For example, the Economist recently cited one study that showed a 14% increase in call center workers’ issue resolutions per hour when supported with AI.
We can even imagine AI eventually easing the labor shortage in certain industries. Imagine, for example, a doctor able to delegate specific diagnostic or treatment activities to a nurse if the nurse is supported by AI.
Marion: Fortunately, expertise in AI is already increasing quickly. In our most recent Industry Update on Information Technology, we discovered that about 12,000 IT executives now list AI competence among their specializations.
Peter: As I said, fresh eyes, an open mind, and new energy—Marion, you are ideally suited for the next phase of TBG’s development. I know that with you leading the way and the excellent team that supports you, our clients are in good hands—probably the best in the career management industry worldwide.
Marion: Thank you, Peter. We will never stop aspiring to live up to that expectation.
Also read: Time For Your New Year’s Revolution