As seen in the December, 2000 issue of ...

Though an index of leading indicators compiled by business research firm The Conference Board in late 2000 indicated slower growth for the U.S. economy for the early months of 2001, search professionals are cautiously optimistic about business prospects for the coming year. "This is a return to reality versus the overheated hiring frenzy we were going through," says Susan Chadick, president and managing director of Manhattan search firm Gould, McCoy & Chadick. "It's not necessarily a bad thing."

Search consultants at other firms agree. "No one has seen the record growth of the past several years, clearly," says Clarke Murphy, managing director and head of North America at Russell Reynolds Associates. "Right now, business is still strong. People are just more cautious." Anecdotal evidence offered by Ms. Chadick bears that out. "We've had an interesting last month," she said of November 2000. Several assignments - two human resources openings and one in e-commerce - were put on hold, while simultaneously the firm launched two new human resource searches for Fortune 500 clients as well as one at an investment bank. "It has really been a mixed bag. Some companies are retrenching, while others are going full steam ahead." Says Kevin Rosenberg, managing director at Irvin( CA-based BridgeGate LLC, a technology focused search firm, "In the crazy markets we turned away business. In slowing one, we'll turn away less."

Continued tight labor markets are on reason for search professionals' optimism Many economists believe that only an economic recession will create an excess supply of workers, and despite slowed growth, an extreme downturn is not on the horizon. "The labor force growth is only about one percent now," says Wes Basel, senior economist at Economy.com, a West Chester, PA research firm. "Lots of jobs are still going begging."

To be sure, however, prudence is still the new shibboleth. "Clients will demand productivity for their money," says Judy Homer, president of information technology search firm J.B. Homer Executive Search. While she doesn't anticipate the demand for senior level technology professionals will diminish, she expects to see "a shift in skills and experience required in the CIOs and CTOs being hired." In other words, successful candidates will be savvy in both technology applications and business strategy "Clients will put more emphasis on business-process improvement and less of cutting-edge, gadget-driven technology, she says.

For publicly traded search firms, the slowing economy and a fewer assignments at Internet start-ups make "it difficult for companies to continue to post the same rates of top-line growth," says Adam Waldo, equity analyst at Credit Suisse First Boston. But public or private the key to success now "is to make sure your business is diversified across geographies and industries," says Russell Reynolds Associates Mr. Murphy.