Newly opened executive positions have been decreasing since March 2022 according to Thrive’s data, where we analyze thousands of executive search records. This slump in leadership hiring has followed macroeconomic trends from public and private markets. While markets continued to struggle in August, leadership hiring surprisingly grew 5% last month.
Meanwhile, the S&P was down 4.2% in August. US Inflation was higher than expected at 8.3%. And, according to crunchbase, VC deal flow was down 10% MoM.
The modest bump in leadership hiring is a bit unexpected as it tends to follow public and private markets. The chart below — from Thrive’s mid-year leadership hiring report —shows the connection between leadership hiring and Venture Capital and Private Equity deal flow.
Perhaps we’re seeing a bounce from an over correction or a lag between the trends rather than the beginning of a true comeback. Either way, it’s a relief considering the recent slump.
It seems unlikely that we’ll notice a significant rebound in leadership hiring until the macroeconomic environment heats up. That said, there are promising signs that a rebound is likely at some point in the near future.
There is a sense that inflation may have peaked, fears of a deep recession seem to be diminishing, and VC and PE dry powder is at or near all time highs. Despite a quiet summer for deal flow, firms are still raising plenty of capital to go around when the time is right.
It also seems like founders and investors are finding common ground on pricing and valuations, which is one of the biggest issues affecting deal flow.
And, we’re now entering a more investor-friendly market according to Pitchbook’s US VC Dealmaking Indicator, “VC Deal making has become 1.55x and 1.52x more investor- friendly for both the late stage and early stage”.
Download Thrive’s mid-year report for more information on trends and insights impacting leadership hiring.