A decline in L.A. County revenues of 40 percent was not enough to knock Korn/Ferry International out of the top spot on the list of largest retained executive search firms.
The 25 largest firms reported 2002 L.A. County revenues of $87.2 million from retained search operations, a 30.3 percent decrease from 2001 revenues of $125.1 million.
Bucking the broader downward trend were No. 2 Heidrick & Struggles International Inc., which increased its revenues to $10.4 million, a 20 percent increase over the year earlier, and No. 3 Spencer Stuart, which saw revenues increase by 25 percent, to $8.7 million.
More in line with the performance of companies on the list was last year’s No. 4, Bench International. It slid to No. 6, having lost a third of its revenues from the previous year.
A newcomer to the list was TMP Worldwide, No. 4, with $6.7 million in 2002 revenues, a 5 percent increase over the previous year.
No. 14 Medley Newman Tucker Group moved up nine places, with increased revenues due to its recent merger with NuFind Executive Search. Decreasing its L.A. presence to one office, Stanton Chase International slid to No. 21 from reduced revenues with the closure of its Agoura Hills office.
Korn/Ferry International remains atop the list of largest retained executive search firms in L.A. County, but its lead is narrowing.
The firm reported $18 million generated through L.A. County retained search services in 2002, down 40 percent from the $30 million reported in 2001.
Korn/Ferry struggled companywide as well. Its $393.9 million in 2002 revenues were $240 million, 38 percent below the year earlier.
“We reflected the overall downturn in (executive search) and are still feeling ripple effects from the dot-com fallout, the weak economy and 9/11,” said Caroline Nahas, managing director of the Korn/Ferry’s Southwest region.
Health care, consumer products and industrial sectors were strong in 2002, according to Nahas, with continued weakness in the financial services and technology sectors.
“There is definitely pent-up demand because people haven’t been making decisions,” she said. “There’s a lot more activity in the pipeline than we’ve seen in a while. Companies are poised to make decisions as soon as the uncertainty is lifted.”
For 2003, Nahas expects flat to slight growth in Southern California. “Companies have been operating on downsized models,” she said. “They need talent in order to restore the efficient and robust model they have had in the past.”
Founded in 1969, Korn/Ferry has 71 offices and more than 500 consultants in North America, Europe, Asia and Latin America.