Thrive’s Q3 Executive Search Quarterly Report analyzes executive searches across various industries and functions. The data focuses on how Q3 2020 performed compared to the same period in 2019. To download the full report, click here. As we analyzed executive search data in Q3, it became clear the market is back to pre-COVID levels. Many executive search teams, however, aren’t saying the same thing. And that’s the narrative of Q3: A series of mixed signals that primarily offer signs of a comeback—but what we’ve found is that comeback has not been equal for all. In order to understand how we got here, it’s worth a refresher on how much opened searches had bounced back by Q2: After a disastrous start to the quarter, June’s opened executive search count ended 63% higher than the bottom of the market in April. We surmised at the time that the initial shock of COVID had lessened across the board, and that companies were more likely to resume executive hiring, particularly for mission-critical roles. That appears to have happened. Q3 2020 opened searches finished down just 2% from their Q3 2019 levels. Compare that to the 22% YoY decline in Q2, and it’s clear the market is back—at least from a top of funnel perspective. Still, recruiters are cautious. In a survey conducted over the closing weeks of Q3, 40% of the leading recruiters we surveyed said their businesses had recovered, while nearly 25% said they were planning to reduce budgets for 2021. Valuable data, yes, but also more a reflection of how executive search leaders are feeling about their business development efforts. A small portion of teams, though, are stealing market share, and accelerating out of a down quarter at an astounding rate. (If you want all the details, it’s in our full report, available here.) So, this bifurcation in responses may partially be a reflection of some teams performing better. A Nuanced Story on Sentiment What’s more interesting, however, is that recruiters are even more equally mixed on the topic of candidate hesitancy: One-third of our survey respondents said that candidates are more hesitant to make moves now than they were pre-COVID. Many described candidates as “clinging to stability,” “busy,” and “stressed” while noting the motivating factor to move is highly contextual. In some instances, survey respondents mentioned that the majority of their placements have been for executives who were out of work or part of an organization that was struggling due to COVID. Others mentioned a silver lining for those interested in a move: the quality of the searches that are open right now. “There are fewer exec searches, but the quality of companies doing searches is much better,” said Chris Johnson, founder and managing partner of Artisanal Talent Group. “As a candidate, you’re going to see opportunities at companies that are leading through this pandemic and still making critical exec hires. Right now is a good time for candidates to listen to what’s out there in the market.” Still, of those reporting a depressed candidate market, nearly half were from executive search teams who said that their businesses had already fully recovered. A confusing state, for sure. Part of the issue, it seems, is that teams are relying more on gut and intuition in steering the ship right now: 40% of recruiters we surveyed said they’re analyzing executive search data infrequently (quarterly or less) or not at all. While the approach may seem reasonable in good times, it’s flawed today. Our analysis of high-performing executive recruiting teams in Q3 found that they have a much stronger grasp on data. Waiting for a Sustained Improvement in Completed Searches The other part of the unease? Completed searches haven’t yet caught up with the sustained improvement in opened searches. Q3 was significantly better than Q2, but it still lacked the type of consistency that will give recruiters comfort in a full recovery. In fact, aside from a strong August, when completed searches were up 11% YoY, there were still double-digit YoY declines in July and September—enough of a mixed signal to give folks pause and remain cautious. Add in the fact that some industries, like telecommunications and travel/hospitality, remain badly bruised from COVID, and it’s clear why many are apprehensive. A good deal of uncertainty remains. “Executive search leaders can deal with good news and they can deal with bad news. What they struggle with is the unknown,” shared Ken Vancini, Thrive’s director of industry insights and former founder of ZRG Partners. “In our industry, uncertainty about the future is worse than any bad news.” All that said, Q3’s performance in terms of opened searches suggests that Q4’s story should be one of a rebound on completed searches. And, at that time, we’re likely to have more consensus on what the future holds.