If I’m at odds with the reporting done this week by Business Week on Heidrick and Struggles, see An Executive Search Firm Falls on Hard Times), it’s not because they repeatedly take the formerly giant recruiter out to the woodshed for poor performance.
Indeed, Heidrick (HSII) has performed poorly. And over a long period of time. My issue with Business Week is that it lays blame to a supposed ‘economic squeeze’ and a trend towards internal recruiting.
The truth is that there is no economic squeeze right now and that while organizations may very well be stepping up their internal recruitment efforts, they are relying on staffing and recruiting firms more than ever.
Further, you can trace the fall of HSII not to some macroeconomic or societal trend but instead back to its scorched earth cost cutting back in 2001 and 2002. It was then that their senior leadership came out proudly, and smugly in my view, in touting how ruthlessly they were cutting costs.
Granted, 2001/2002 was tough. It was 2008/2009 tough. You can’t fault business leaders with budgets and stockholders to report to for making sharp turns.
But, sharp turns can upset passengers, and when those passengers are employees, you can destroy their long term sense of commitment. HSII wasn’t alone in doing this. In fact if you look at their immediate competitors, Michael Page is one of the few that came out of that period well.