[SINGAPORE] Dozens of executive search consultants from around the region gathered in Singapore recently, to network and hear about global trends in talent management and the imperatives for leaders today.


Sussing out talent with leadership qualities is all in a day's work for professional recruiters - known colloquially as headhunters - who typically operate at the C-suite level, helping companies in their search for a CEO or CFO.


Only, for many headhunters these days, pure search is not all they do. Indeed, for the Big Five names in the business - Korn/Ferry International, Egon Zehnder International, Spencer Stuart, Heidrick & Struggles, and Russell Reynolds Associates - executive search no longer accounts for all of their revenue.


It hasn't, for more than a while, as headhunting firms have broadened their client offerings beyond search to services in the leadership and talent-management space.


In early June, the worldwide Association of Executive Search Consultants (AESC) - which organised the two recent networking events here - officially acknowledged the development: It changed its code of ethics, professional practice guidelines and its tagline to reflect the integration of leadership consulting into the search industry's scope of offerings.


The AESC tagline now reads: "The global association for retained executive search and leadership consulting firms". Said Peter Felix, president of the New York-based association: "The decision to expand the AESC remit was made to recognise what was already happening and to put a stake in the ground for this development in the role of executive search consulting ... The metamorphosis had been occurring over a number of years, and indeed is still far from complete."


Korn/Ferry International - the leading firm in the industry with US$790.5 million (S$1.01 billion) in fee revenue in fiscal 2012 that ended on April 30 - now sees itself as a "premier global provider of talent-management solutions", with an answer at hand for clients' workforce needs at every rung.


Back in 2001, the firm's then chairman and CEO, Paul Reilly, spelt out in an interview with BT his vision of transforming Korn/Ferry "from just search into a broader human capital services firm". By then, the listed firm had, after some 30 years of C-level search work, moved "down" into the middle market with an online recruiting unit in Futurestep, and also ventured into management assessment. Futurestep has since been re-invented to cater to outsourced and project recruitment.


Seeking to differentiate itself from its rivals, Korn/Ferry made a series of acquisitions between 2007 and 2010 to build up a suite of leadership and talent-consulting services, adding Lominger, Leadersource, Lore International and Sensa Solutions to the group. In fiscal 2011, the Los Angeles-based firm's non-executive recruitment businesses generated 26 per cent of its total fee revenue.


For Korn/Ferry - and the other search firms - the difficult economic climate, particularly the 2008 global downturn, no doubt gave impetus to the move to diversify.


Heidrick & Struggles CEO Kevin Kelly suggested as much in a Businessweek article published in early 2009, speaking of plans to change the firm's strategy dramatically over the next five years, so that it focuses not only on "the acquisition of talent at the senior level" but also on helping clients develop and retain their employees.


Today, Heidrick & Struggles - the other public-listed top-league search firm and the oldest of the Big Five, founded in 1953 - calls itself the "world's first leadership advisory firm, blending executive search and leadership consulting".


While search still accounts for a good 90 per cent of its business, with leadership consulting just about 10 per cent - still some way from Mr Kelly's vision of perhaps a 60-40 split - "what's clear is there's a blurring of lines between the two", said Harry O'Neill, managing partner of Heidrick & Struggles' Hong Kong office and current AESC global chairman.


"For us, search and leadership consulting are blended," he told BT, given the need to help clients understand what leadership they need to deliver on future strategy, the leadership they have today, and how to close the gap between the two. "There's huge traction between our search and leadership colleagues."


Indeed, Heidrick's search professionals do leadership advisory work as well, says Gareth McIlroy, regional managing partner who runs the firm's leadership consulting practice out of Singapore.


What Heidrick & Struggles chose to do differently, he says, was to "keep very much people-focused" in delivering its services, by building up leadership advisory expertise rather than use generic tools or products.


"We have been resistant to products, because I believe that if you have products, you will sell products," said Mr McIlroy, who joined Heidrick four years ago from a regional training and consultancy background. "We don't sell products. We sit down with the client and we listen for what will create solutions. Frankly, quite often that involves even recommending some of our competitors' products. But it's because I want to be able to sit opposite the client and be completely objective about what I think the solution needs to be."


Still, a 2008 partnership in New York between Heidrick & Struggles and Board Recruiting, a service of the NASDAQ OMX Group, to help companies in their search for directors, led eventually to a high-profile CEO placement in Singapore: Then OMX president Magnus Bocker ended up joining Singapore Exchange in 2009. Heidrick & Struggles was also behind the CEO succession at Singapore Airlines, when Goh Choon Phong took over from Chew Choon Seng.


"Our business is a bit counter-cyclical," said Mr McIlroy about leadership consulting.


"When times are tough, that's a great time to look at leadership challenges. Given some of the challenges right now in Europe, it's interesting for me that two of the biggest accounts we currently have here are focused a lot on what's happening in Europe, and during this period of uncertainty, we want to make sure that the teams that are in place there are the right teams first of all, and are as effective as they can be."


This is where another core piece of leadership consulting comes in - management assessment and appraisal, which features strongly in the business model of the other three Big Five firms. At Egon Zehnder, for instance - where executive search is but one of six service offerings - all its consultants deliver "leadership strategy services", including appraisal and team effectiveness review.


Meanwhile, the outlook for the search sector remains a little patchy.


Globally, the size of the industry hit US$10.4 billion last year. While still below 2008's US$11 billion peak, it was the second consecutive rebound since the big recessionary plunge of 2009.


But things seem to have slowed somewhat this year. The AESC's 2012 first-quarter report - representing executive search activity in 46 countries - found a small 2.5 per cent rise in the number of new executive searches started, compared with the preceding quarter. But the overall trend was a decline in revenue, both on a quarter-to-quarter and year-on-year basis (-6.3 and -7 per cent respectively).


AESC's Mr Felix noted: "Many search consultants have felt continuing uncertainty in demand from their clients as economic turbulence persists in various parts of the world. Certain sectors such as financial have suffered considerably given that the outlook for banks and financial institutions still remains so unclear."


But while the search business goes up and down, leadership advisory services have - at least for Heidrick & Struggles - "been growing much faster", said Mr McIlroy, who spoke to BT between consulting stints in Africa and China. "In the downturn a few years back, our leadership business continued to grow; in fact, it grew even faster."


Mr Felix, too, remains upbeat: "Quarterly statistics are only one indicator of a trend but there is no doubt that confidence in the executive search market has declined since the end of last year and is unlikely to fully recover until we see clients regain their confidence about the future and again start searching for that rare commodity: executive talent.


"I am confident that when the worldwide economy begins to grow again and the talent shortage begins to 'bite', that we shall see a significantly heightened demand for retained executive search services."


In any case, driven by trends in the economy and technology, the key players are likely to have to continue to restructure and reinvent themselves.


As Korn/Ferry proclaimed in its 2011 annual report: "Recognising that great companies plan for the complete talent life cycle, we continue to orient ourselves around the broader talent agenda of our clients." As a result, it adds, "we are not only evolving our firm but also transforming an entire industry".