December 23, 2024 – In 2024, the recruiting industry experienced a mix of challenges and opportunities. Recruiters sought innovative ways to deliver value to their clients, as many firms faced dips in revenues and search activity. Investor-driven market consolidation continued to reshape the landscape. Search consultants faced hurdles such as recession fears, talent shortages, and a candidate-driven market. Meanwhile, talent acquisition for the private equity sector emerged as a key area of focus and growth. These trends dominated our newswires, rankings and market intelligence reports in 2024. As we do every year, Hunt Scanlon Media took on the challenge of selecting our Top 10 stories that shaped the recruiting landscape.
The executive search industry faced significant challenges in 2024, with a double-digit decline in demand, particularly in the private equity sector, as hiring decisions slowed amidst economic and political uncertainty. However, optimism is building for 2025, with experts telling Hunt Scanlon Media they anticipate a rebound in portco hiring and deal activity, potentially matching record levels from previous years. Tim Tolan of The Tolan Group highlights a range of factors contributing to the slowdown, including election uncertainty, interest rates, and shifts in workplace preferences. With 2025 on the horizon, Mr. Tolan expresses cautious optimism, citing potential market changes, renewed hiring activity, and technological advancements like AI as drivers of recovery. James Abruzzo, managing partner of JGA Partners, also explored Hunt Scanlon to discuss how the executive search industry, once dominated by relationship-building, has undergone a seismic transformation over the past decade.
Acquisitions also made big news in the recruiting industry this past year. Hunt Scanlon highlighted two major acquisitions: Hanold Associates being acquired by entertainment and sports agency Creative Artists Agency (CAA); and ZRG acquiring Jamesbeck, a New York City-based recruitment firm specializing in senior-level talent for the broad investment management community across private market and traditional firms.
We also look at the remarkable habits of successful dealmakers. Updated research from McKinsey & Co. confirms that companies regularly and systematically pursuing M&A deliver better shareholder returns than companies that don’t. McKinsey senior partner and global leader M&A strategy, Jeff Rudnicki, takes a deep dive with Hunt Scanlon Ventures CEO Scott A. Scanlon.
Daversa Partners also joined Hunt Scanlon to talk about how the market for cybersecurity recruiting is experiencing significant growth due to the increasing frequency and sophistication of cyber threats faced by organizations globally. According to Jason Slattery of Daversa Partners, organizations are actively seeking innovative leaders who can navigate complex security challenges and foster growth in this dynamic environment.
Another important topic we covered this year is how the new rule banning noncompete clauses could affect recruiting firms. With the Federal Trade Commission’s new rule banning most noncompete clauses in employer agreements, big changes could be underway when trying to recruit talent. A handful of top executive search firms join Hunt Scanlon to discuss this hot topic.
We also looked at how private equity/venture capital’s unquenching need for talent across the sector continues unabated. Bespoke Partners’ Second Half 2024 Private Equity Talent Report highlights key trends in leadership transitions, emphasizing the need for effective recruiting practices to navigate this evolving landscape. Elan Pratzer, CEO and founder of System-3, also takes a look at how executive search consultants and PE firms can leverage technology to improve their talent evaluation process. Ben Dewar of NU Advisory Partners also sat down with Hunt Scanlon Ventures managing director, Drew Seaman, to discuss the trends he’s been observing in recent work for VC firms and their portfolio companies. Another must read!
One of our most popular stories of year was with Larry Lewellen, a senior consultant with The Registry, a Peabody, MA-based interim executive solution. Mr. Lewellen delves into the qualities that define successful interim CHROs and the organization’s approach to aligning leadership with institutional culture. He discuss the importance of external interim CHROs for leading universities.
Let’s take a look back at the top recruiting stories of 2024!
Executive Search in 2024: Challenges, Trends, and Hopes for a Hiring Resurgence in 2025
For many search firms in almost all industry segments, 2024 has been a tough year. There are many reasons for the recent downturn, and some firms have experienced a dip in revenues for even longer, according to Tim Tolan, founder, chairman, and managing partner of The Tolan Group. “Lots of changes are on the horizon for 2025 on the hiring front, and search firms are waiting with bated breath while hiring decisions are on hold, and draft fee agreements are (still) sitting in DocuSign waiting to be signed,” he said. “Decisions are dragging, as are active search engagements, as hiring managers and leaders struggle to make hiring decisions in the environment, we are all trying to navigate.” In the Hunt Scanlon 2024 Executive Recruiting State of the Industry Report, the numbers reflected a double-digit downturn in demand for executive recruiting, with the private equity sector being the most affected. “We’ve seen and experienced that firsthand, but we feel positive changes are on the horizon,” Mr. Tolan said. He notes that there are many reasons for the executive search dip, but this current downturn appears to be based on several factors. First, he points to the election. “Everyone was waiting on the long-awaited results of the recent presidential election to learn who would win and take the helm in January of 2025,” he said. “Now that the election is over and the incoming Trump transition team gets ready to steer the ship, lots of changes are anticipated in the financial markets regarding interest rates, tariffs, and a new cabinet.” These changes in governance predict a turnaround in hiring in the PE sector. According to many experts, portco hiring should be in full swing. A recent article in the Wall Street Journal stated, “Private-equity executives are bullishly deploying swelling cash piles, as the industry moves out of a deal slump that for years soured fundraising and cash distributions to fund investors.” Mr. Tolan thinks this sounds encouraging. “Some estimate the deal flow and activity to be a repeat of 2021, which was a record year for hiring and overall deal-making in the sector,” Mr. Tolan said. However, he is not sure. “Others predict that 2025 should be robust and could result in deal volume of 2023 and 2024 combined,” he said. “We are all hoping those upside predictions come true. One thing is for certain—limited partners are pushing hard to get their returns for their previous investments, and there is a logjam as the hold periods have been extended to record levels, while some investors are concerned that valuations are too high.”
Hanold Associates Acquired By Creative Artists Agency
Hanold Associates HR & Diversity Executive Search has been acquired by entertainment and sports agency Creative Artists Agency (CAA). Financial terms of the deal were not disclosed. Co-founded by Neela Seenandan and Jason Hanold, Hanold Associates recruits diverse corporate officers and board directors, with a significant focus on leading high-profile searches for chief people and HR officers across a wide array of industries. Hanold Associates’ team of 20 colleagues will be folded into CAA’s executive search division. “We continue in our longstanding efforts to innovate growth opportunities across all facets of CAA that further our commitment to providing unmatched resources to our esteemed clients worldwide,” said Paul Danforth, CAA managing director and president, CAA Sports. “CAA was the first talent agency to launch an executive search division, and we are thrilled with the incredible success that Joe Becher, Asher Simons, and their team consistently deliver to their clients across sports and entertainment. The addition of Hanold Associates, and its unique expertise, will amplify our efforts in this important service area and we are excited to see what these two teams can accomplish together.” CAA Executive Search was co-founded by Mr. Becher and Mr. Simons in 2017. It serves the sports, entertainment, and media industries, working closely with its clients to help build leadership teams through executive search; designs and develops organizational structures and compensation plans; and engages with investors, venture capital and private equity firms on human capital due diligence projects, providing expert insight into senior management teams within acquisition targets. Since its launch, CAA Executive Search has worked across major global sports rightsholders, technology companies, record labels, esports leagues and franchises, gaming publishers, live entertainment promoters, sports betting companies, traditional and digital media businesses, agencies, global brands, private equity firms, VC funds, and family offices. “We are thrilled to join forces with such an outstanding team of people at CAA, who share our values, commitment to talent, and a great culture while elevating others,” said Mr. Hanold, now president CAA Executive Search. “This partnership allows us to serve our existing and new clients more broadly, bringing the full reach, connectivity, and relationships of CAA into our client service offerings.”
The Registry: Transforming Higher Education with Deeply Experienced Interim HR Leaders
The need for HR transformations, a new report finds, is driving a dramatic rise in the number of interim CHROs being asked to provide strategic leadership in times of change. In just the first half of 2024, demand for interim CHROs matched the entire year of 2023, according to Heidrick & Struggles’ latest Fortune 1000 CHRO Trends data. The report was for all industries, and higher education is seeing the same trend. Universities increasingly have recognized the strategic importance of HR in addressing immediate and long-term challenges such as labor disputes, faculty/staff engagement, and institutional restructuring. Interim CHROs bring specialized expertise to tackle these complex issues while institutions seek permanent leaders. The organizational upheavals of the pandemic era highlighted gaps in organizational culture, equity, efficiency and effectiveness of business processes. Many interim CHROs were brought in to stabilize workplace dynamics and elevate the functioning and impact of HR policies and processes. Rosa Morris, global market lead, education at ZRG confirms: “At The Registry, we continue to see high demand for experienced CHROs who can serve as strategic partners to presidents and chancellors before passing the baton to a permanent leader.” Amy Lauren Miller, president and COO of The Registry emphasized: “External interim HR leadership can be critical for institutions facing transitions, crises, or growth challenges. Our interim leaders not only manage daily HR operations but also help to design HR strategies with the institution’s long-term goals to improve overall organizational performance.” The Registry, a Peabody, MA-based interim executive solution, recently helped find interim HR leaders for a handful of leading schools including Rice University and the University of California. In September, The Registry recruited Cynthia Pepper as a member of The Registry and then placed her at Rice University as the interim associate vice president, human resources and CHRO. She has deep experience in change management and HR program development, working both in-house and as a consultant. “With her skills and expertise, Cynthia is the perfect candidate for this position, and we look forward to hearing about her many accomplishments,” The Registry said. “My current role is a temporary assignment as interim CHRO, with my primary responsibilities focused on how I can help the HR team provide the best possible support for the campus community,” Ms. Pepper said. “I have spent my time engaging leaders across campus to understand their perspectives and challenges and bring those back to the HR team so we can address their needs.”
A Look at Executive Search in 2025
For decades, relationships were the cornerstone of executive search. “A strong network of C-suite executives and hiring managers could singlehandedly propel a consultant to success,” said James Abruzzo, managing partner of JGA Partners. Deals were often secured through trust and familiarity, forged during coffee meetings, networking events, or rounds of golf. This approach was effective in a less crowded, less complex marketplace. But today, the industry looks very different. Several key factors have reshaped the landscape. “For search firms, this new reality requires a sharper focus on differentiation, operational efficiency, and delivering measurable value to clients,” Mr. Abruzzo says. In the past, external search firms were the go-to solution for finding top-tier talent, Mr. Abruzzo explains. “But as corporate talent acquisition teams have grown in size and sophistication, this dynamic has shifted,” he said. “Many companies now rely on in-house recruiters to manage executive hiring, reducing their dependency on external partners. While internal teams excel in many areas, they often lack the bandwidth or specialized expertise to handle highly complex or confidential searches,” Mr. Abruzzo said. “This creates opportunities for external firms to step in, but only if they can offer something that internal teams can’t—whether that’s deep industry knowledge, access to passive candidates, or a more robust search process.” The rise of platforms like LinkedIn and other subscription-based databases has transformed how talent is sourced, Mr. Abruzzo notes. “Information that was once guarded and difficult to access is now readily available to anyone with an internet connection,” he said. “For clients, this has leveled the playing field. They can now conduct their own preliminary searches, often identifying potential candidates without the help of a search firm. Private equity firms have emerged as major consumers of executive search services, bringing a new level of rigor and intensity to the process. For search firms, serving PE clients requires a different approach. Speed, precision, and a deep understanding of the PE landscape are essential. Firms must also be prepared to navigate the complexities of working with multiple stakeholders, including portfolio company executives, PE partners, and board members.”
A Look at the Growing Need for Cybersecurity Executives
The market for cybersecurity recruiting is experiencing significant growth due to the increasing frequency and sophistication of cyber threats faced by organizations globally. Companies are seeking skilled professionals to protect their data and infrastructure, leading to high demand for cybersecurity talent across various industries, executive recruiters tell Hunt Scanlon Media. This competitive landscape has resulted in rising salaries and benefits for cybersecurity roles, making it a lucrative field for job seekers. “The cybersecurity recruiting landscape is undergoing an unprecedented surge, fueled by a wave of activity across various sectors in both enterprise and cybersecurity domains,” said Jason Slattery, a founding partner at Daversa Partners, in a recent interview with Hunt Scanlon Media. “This growth, driven by venture-backed and strong private equity investments, creates a dynamic ecosystem rich with opportunities at every stage of development. We’re witnessing a range of innovations—from cutting-edge platforms to advanced tools and enterprise-grade solutions,” he said. “Product-led growth (PLG) strategies are also emerging, presenting new avenues for talent acquisition in this rapidly changing market. A significant focus is on managed service providers (MSPs) and managed security service providers (MSSPs), which are redefining the landscape by offering vital cyber defense mechanisms against evolving threats.” The demand for cybersecurity professionals is not just a passing trend; it reflects the critical importance of security in today’s digital age, according to Mr. Flattery. Recent data indicates that the volume of search activity in cybersecurity has skyrocketed by 150 percent compared to last year. “This surge highlights a growing awareness of cyber threats and an urgent need for skilled professionals who can navigate the complexities of protecting sensitive information,” Mr. Flattery said. “As businesses increasingly prioritize cybersecurity, innovative and effective recruitment strategies have never been more essential,” Mr. Flattery says. “Organizations are on the lookout for talented individuals who can enhance their defenses, making the infusion of talent crucial for fostering growth and ensuring that enterprises are prepared for the challenges of the digital landscape.”
A Look at Key Trends in Executive Recruiting for Private Equity-Backed Companies
A long-awaited interest rate cut in the U.S. finally arrived in September. Bespoke Partners’ Second Half 2024 Private Equity Talent Report asks will it thaw the deep freeze gripping private equity deal-flow and exits? Signs were that prospective deals in late Q2 and early Q3 had already priced in the expected rate cut and deals were indeed picking up. PitchBook reported that first-half middle-market deal flow across all types of private equity deals was up 10 percent year-over-year. Will the flood gates for deal-flow and exits open? “Massive amounts of dry powder is waiting to be put to work,” the Bespoke Partners’ report said. “Portfolios that have swelled with more companies than usual. Limited partners are clamoring for distributions. Still, challenges persist.” What will the remainder of 2024 and 2025 hold in store? Will the slow return to deal-flow continue or be nipped in the bud by resurgent market headwinds? As Bespoke noted in an earlier edition of this report, the only certainty is uncertainty. The Bespoke report found that turnover is on the rise or remains elevated for key enterprise leadership roles, including CEOs, GTM leads and, in a new development, leaders in operations roles. Turnover for other senior leadership roles remained flat or decreased, which indicates some stability and caution about making changes at this time. CEOs, in which Bespoke includes presidents, GMs and others with P&L responsibility, experienced a major surge in turnover in the first half of 2024, with the average rising 46 percent from the prior period. But the jump in turnover actually brings the index score closer to the average of approximately 4.0 that Bespoke has tracked since Q1 of 2021. CEO turnover was depressed for much of 2023 in large part because of the slowdown in exits, which are typically the trigger that leads CEOs to be open to new roles, the report found. Anecdotally, CEOs have been “heads down” to focus on bringing their companies to a point where an exit is possible, the Bespoke report explains. “A chief strategy for this effort has been to grow a company in a capital-efficient manner to enhance the EBITDA margin in line with a sponsor’s investment thesis,” the report said. “But as new platform deal-flow has slowly recovered, new opportunities are drawing some CEOs away and turnover is gradually returning to the normal level. Bespoke sees this surge reflected in compensation data as well.”
Using Leadership Assessment to Win the PE Talent Wars
Talent has become an increasingly acknowledged driver of value creation in private equity firms as pressure to deliver outsized returns increases. With this, PE funds have invested in executive recruiting services and built out their own internal functions to find the best talent in an increasingly competitive landscape. Nevertheless, the evaluation process for talent hasn’t evolved enough since the industry’s start. “I’ve watched throughout my entire career in executive search the way decisions are made on the selection and evaluation of human capital – statistical results haven’t improved much, and we can do better,” explained Elan Pratzer, CEO and founder of System-3. “Executive search and private equity often overly rely on experience, assuming if ‘you’ve done it before you can do it again.’ But that does not take circumstances into account. Consequently, a person who has been very successful in one set of circumstances may not be able to repeat the same success in a separate set of circumstances.” Mr. Pratzer said that even though private equity and executive search leaders often make incredibly intelligent decisions around talent and fit, he noted that “if they applied a data-driven system to their approach, they would do even better more consistently.” Current leadership assessment technology has been a key tool for assessing talent success; however, those assessments have typically measured personality traits that suggest who a person might be. Mr. Pratzer says, “to increase the odds of the accurate assessment of potential success, you need to understand what leadership behaviors are required to be successful and to be able to determine if those you are assessing manifest those behaviors under pressure. That data, if objective, will help executive search firms and private equity firms make better decisions more often and be a game changer.” “Not only can these behavioral assessment tools more effectively help PE firms with aligning on talent fit, but they can help executive search firms carry out a more efficient process,” said Mr. Pratzer. “You can do more tailored interviewing and reference checking, saving time, being more informed and finish your searches earlier; with this kind of technology, search firms can be even more productive,” he noted.
A Look at How the New Rule Banning Noncompete Clauses Could Affect Recruiting Firms
On April 23, the Federal Trade Commission (FTC) issued a new rule that bans non-compete clauses for workers across all industries, with limited exceptions. The rule will prohibit most employee non-compete agreements with retroactive effect, except existing non-compete provisions. The rule also requires employers to notify workers, including former employees, that the non-compete clauses are no longer in effect. The rule defines “worker” to include employees, interns, externs, independent contractors, volunteers, apprentices, and sole proprietors, whether paid or unpaid. However, franchisees are not included in the context of a franchisor-franchisee relationship, but do include employees of franchisees. The rule is not yet effective and legal challenges are already looming. However, the FTC predicts that the rule will lead to higher worker earnings, reduced health care costs, new business formation, and an increase in innovation. ”The FTC’s proposed ban on non-compete agreements in the U.S. is expected to be a hot topic, particularly in industries where closed ecosystems and client ownership are paramount,” said Kyle Samuels, founder and CEO of executive search and HR advisory firm Creative Talent Endeavors. “Fields like law, talent management, and consulting—where relationships with clients form the bedrock of business—will likely experience heightened concern and debate over the ruling. Critics in these sectors fear that eliminating non-compete clauses could erode their competitive advantage by making it easier for former employees to poach clients or leverage sensitive information. However, for professionals who frequently move across industries and for those in roles where client ownership is less relevant, such as executives in B2C companies, where you sell to millions as opposed to a small group of big spending corporate clients, the impact of this ruling will likely be minimal. These roles often emphasize internal management, employee relations, and strategic planning rather than direct client relationships. “Ultimately, while the ruling has sparked strong reactions in client-driven industries, it may pave the way for greater job flexibility and mobility across the broader workforce,” said Mr. Samuels. “The final form of the ruling will depend on public feedback and legal challenges, but its ramifications could reshape employment practices nationwide.”
Winning Through M&A: The Remarkable Habits Of Successful Dealmakers
Nearly 15 years ago, McKinsey & Company set out to answer a critically important management issue: What type of M&A strategy creates the most value for large companies. The answer that came back was clear: Companies that practice programmatic M&A are likely to outperform competitors. In 2019, McKinsey took another look. It’s research reflected the growing importance of placing multiple bets and being nimble with capital. In a dataset of 1,000 global companies examined over a 10-year period from 2007 to 2017, programmatic acquirers achieved higher excess total shareholder returns than did industry peers using other M&A strategies, such as large deals, selective acquisitions, or organic growth. In fact, the alternative approaches seem to have underdelivered. Companies making selective acquisitions or relying on organic growth, on average, showed losses in excess shareholder value relative to peers. Now, McKinsey has taken a fresh view of new evidence in the time period of 2013 to 2023, examining findings from the firm’s most recent Global 2,000 study to better understand what drives shareholder returns. Their latest findings bolster the case for programmatic M&A. But beyond doing more deals, what gives programmatic acquirers an edge – and how does their dealmaking translate to value creation? “We have identified key actions that programmatic acquirers take and the relationship that those actions have to outperformance,” said Jeff Rudnicki, a McKinsey senior partner and global leader M&A strategy. “Companies that practice programmatic M&A are likely to outperform competitors, that much we know,” he said. But taking a programmatic approach doesn’t ensure that a company will necessarily create more value than it would by taking a different approach to deals, he noted. “Creating value through M&A takes commitment,” said Mr. Rudnicki. “The most effective dealmakers build and refine their expertise by doing multiple deals over time,” he said. Yet deal counts are the outcome, he noted, “not the determinant of having an effective strategy.”
ZRG Acquires Jamesbeck
ZRG, a global talent advisory firm and portfolio company of RFE Investment Partners, has acquired Jamesbeck, a New York City-based recruitment firm specializing in senior-level talent for the broad investment management community across private market and traditional firms. Hunt Scanlon Ventures, a Greenwich, Connecticut-based human capital M&A advisory firm, served as an advisor to ZRG. “This strategic move aims to establish ZRG’s presence in asset management and will support the firm’s existing private markets clients by adding a new channel for senior roles at the management company level across investments, product, and fundraising,” said ZRG. “Jamesbeck has been at the forefront of decisive changes that have impacted asset management leadership for more than two decades,” said Scott A. Scanlon, CEO of Hunt Scanlon Ventures. “The firm’s acquisition by ZRG will be beneficial to clients across the global investment management space who have come to rely on its network, judgment and guidance around senior-level leadership talent,” he noted. “The acquisition of Jamesbeck is a game-changer for ZRG,” said Larry Hartmann, CEO of ZRG. “This takes us to a new level in financial services and more specifically investment management and enhances our ability to support private markets firms at both the portfolio company level and the management company level. Our goal is to be a leading partner in all talent matters for private markets firms globally, and this acquisition is a significant step in that direction.” Jamesbeck specializes in the investment management industry across public and private markets. The firm recruits senior-level talent across investing, distribution, product and C-suite positions on behalf of a range of clients from boutiques to the largest multi-product organizations. Jamesbeck’s Melissa Norris, managing partner, and Beth Rustin, founding partner, will become the co-heads of asset management search at ZRG. With this acquisition, ZRG enhances its financial services brand by adding a team dedicated to asset management while providing a complement to the breadth of work already underway with private equity portfolio companies through executive search, interim, and RPO solutions. “Joining forces with ZRG is an exciting opportunity for Jamesbeck,” said Ms. Norris. “We have always been committed to delivering exceptional talent solutions to our clients across the front office, but being part of ZRG will enable us to broaden our reach and impact, leveraging their extensive resources and innovative approach to talent advisory.”
Leadership Needs Shift Dramatically as VC Moves to Wartime Footing
Over a 20-plus-year search career, Ben Dewar of NU Advisory Partners has led hundreds of recruiting engagements across every corporate function imaginable. Along the way, he has recruited dynamic executive talent into CxO and VP roles for VC-backed, PE-backed and public high-growth technology and consumer companies. From that perch, he has witnessed up close and personal just how transformational great talent can be – and what happens when businesses, or an entire sector, can’t tap the fresh perspectives that talent brings. “Compared to a placement at, say, a Fortune 500 company, a world-class executive can make an outsized difference at a smaller, venture-backed company,” he said in a recent one-on-one interview. “In fact, two of the main reasons I enjoy working in venture are impact and immediacy.” Prior to joining NU Advisory as a partner five months ago, Mr. Dewar spent nearly a decade at True Search, where he built and co-led the firm’s people, talent, and legal practice. There, he specialized in chief people and chief legal officer searches for growing businesses across the tech and consumer sectors, across all asset classes. He also led searches for investment, talent, and legal professionals into investment firms. So, what is Mr. Dewar seeing now as the landscape for VC continues to shift – and, with it, a long list of changing requirements for talent? Capital flows have declined sharply over the past two years, he said, albeit from abnormal highs. “Venture capital firms have raised significantly less money over the past few quarters than they did during 2021 and 2022,” he noted. “Global funding was $58.5 billion in the fourth quarter of 2023, down 25 percent from a year earlier. Exits from VC-backed companies are down, too,” he said. “But the overall numbers are very similar to where they were in 2019. The COVID years were just a different era – a dramatic outlier,” he pointed out. As a result, VC firms have been shifting their allocation of funding toward ‘barbell’ patterns of investment. “At one end of the barbell, investors are making early bets on very young companies that will take many years to reach an exit opportunity, IPO or otherwise,” Mr. Dewar said. “At the other end, VCs are doubling down on the proven winners within their portfolios – those with solid financials, sustainable growth and grounded valuations,” he added.
Related: Predicting Talent Acquisition Trends for 2025
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
