Recruitment of top executives, 40% cheaper

Fees of executive search companies - some of the most profitable businesses in the consultancy sector - have gone down by as much as 40% over the last few months, amid a decline in the volume of hiring and amid cost-related pressure for companies that decide to hire or to replace top management teams. "Fees operated on the executive search market have seen a decline lately, by as much as 30-40% of those operated six months ago. This decline is correlated with a reduction in the number of requests we have seen," says Alin Radulescu, executive search consultant with specialised company Advice Human Resources. The executive search business operates with 50-60% average profit margins, but the declines recorded over the last few months could "bite" into the profit margin. Executive search consulting costs a lot, because it is involved in recruiting top executives, which get to run businesses of tens or even hundreds of millions of euros and thousands of employees. Executive search is a business where companies can collect more than they spend. Although many recruitment companies have cut their fees, their rates have not reached the lowest level so they may continue to decrease over the coming months.