Executive Headhunters Squeezed by In-House Recruiters

Search firms feel the profit squeeze as big companies handle more talent quests in-house
Illustration by Kyle Platts

Heidrick & Struggles Chief Executive Officer Kevin Kelly made his name raiding corporate America’s ranks on behalf of his clients. These days a lot of them are turning the tables and hiring his employees to do the work themselves. Companies such as General Electric, Coca-Cola, Pfizer, Microsoft, and Nike are increasingly using their own executives—many lured from outfits like Heidrick—to recruit talent and avoid fees that can run as high as 40 percent of a new hire’s first-year compensation. Heidrick is “seeing a trend of individuals going to work at clients” to do in-house recruiting, Kelly told analysts on a July 31 conference call. “That’s something new that we’ve seen over the last 12 to 18 months.” Three months later he told the same analysts that the talent drain to clients was continuing.

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