Century City-based Korn Ferry has returned to the No.1 spot on the Business Journal’s list of executive search firms, ranked by local revenue.

Korn Ferry surpassed Chicago-based Spencer Stuart for the first time in three years.

Korn Ferry’s 2016 revenue grew by almost 6 percent to $24.6 million from $23.3 million in 2015, bucking the trend of many of its peers in what some experts say is a sluggish industry. No. 2 Spencer Stuart, which has an office in Westwood, lost the top spot after its L.A. revenue decreased 23 percent year over year to $18 million.

The 20 companies on this year’s list saw their combined L.A. revenues remain about flat, with less than 1 percent growth to $139 million last year from $138 million in 2015, largely led by half of the companies.

The 14 firms headquartered in Los Angeles County saw their combined local revenue increase to $72.6 million, up roughly 2 percent from the previous year. Companies based in the county comprised 70 percent of this year’s list, slightly lower than last year’s 76 percent representation.

Retained executive search firms act as third-party recruiters and seek individuals to fill high-ranking executive positions in companies. In order to qualify for the list, executive search firms must have at least one office in Los Angeles County.

Some companies with local offices declined to disclose revenue and thus don’t appear on the list.


Korn Ferry’s L.A. revenue was a small part of the global firm’s $1.62 billion in total revenue for the fiscal year ended April 30, an increase of 20 percent from $1.35 billion the previous year. The company is one of the largest executive search firms in the country, with three L.A. offices in the county and 116 worldwide.

The firm operates across a range of industries, but has seen strong demand in health care and life sciences as well as consumer, technology and financial services in the past year, said Managing Partner Chris Von Der Ahe (see related Op-Ed, page 55).

“Our business has grown as the economy has continued to do better and better for the last three years, and so we are seeing solid business across the many industries that we serve,” Von Der Ahe said. “We are forecasting continued growth across our business in both executive search and talent advisory.”

The firm wouldn’t disclose its clients, but has taken on some high-profile searches. Pro baseball’s Washington Nationals hired Korn Ferry in March of last year to help find a naming-rights partner for Nationals Park in Washington, D.C.

Zurich-based Egon Zehnder International Inc. was the biggest gainer by percentage among all of the companies on the list, with a year-over-year revenue growth of 71 percent to $12 million. The C-suite staffing firm jumped to No. 4 from No. 8 last year.

Egon Zehnder Managing Partner Todd Hutchings, who’s been leading the downtown office for 11 out of the past 12 years, said the growth in revenue followed a move to double the size of its L.A. staff last year.

“The L.A. market itself is the most robust market that I’ve seen in my 12 years; there’s a lot more local work than historical,” Hutchings said.

The company recently experienced notable growth in its hires for the portfolio companies of private equity firms, he said.

Century City-based Lipson & Co. was this year’s second-biggest percentage gainer and highest gainer among companies headquartered in Los Angeles County. The No. 18 company, which serves the consumer products, media and entertainment industries, reported a 60 percent rise in revenue to $800,000 last year from $500,000 in 2015.

Industry plateau?

Spencer Stuart was this year’s biggest percentage decliner with a 23 percent drop in county revenue.

Head consultant Brigitte Frankel said Spencer Stuart’s L.A. decrease was largely due to a couple of internal consultant moves, and that revenue per consultant is actually up.

Chicago-based Heidrick & Struggles International Inc. followed with a 19 percent decrease in year-over-year revenue to $10.5 million.

Seven companies’ revenues decreased in 2016, while three were stagnant in growth.

UCLA professor emeritus David Lewin said he believes the executive search firm industry might have seen its heyday come and go.

“The industry is matured with a bunch of competitors fighting for a moderately expanding business but not greatly expanding business,” Lewin said.

Retained executive search firms also are facing greater competition from in-house recruiting entities as well as from consulting companies.

According to a 2010 report by the Association of Executive Search and Leadership Consultants, more than 76 percent of its members said that competition in the industry had increased, with 58 percent saying they were losing searches to contingency firms and 42 percent saying they were losing searches to in-house talent acquisition teams.

Lewin said that in order for a company to find value in hiring an external executive staffing firm, companies “must believe that the eventual scope in quality is on balance with the costs they’re going to incur.”

C-suite staffing firms traditionally charge anywhere from one-third to a half-year’s worth of the executive compensation if they successfully place an executive in the company that retained them.

Spencer Stuart’s Frankel agreed that the executive search industry has matured, but said her company is “seeing strong and much more robust growth around services that the same clients are interested in such as company culture, top team effectiveness and executive assessment.”

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