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Japan Ponders Retirement Wave
March 2007
During the IIC Partners Asia/Pacific regional meeting in Tokyo in February, Board Chair Martine Bournerias was interviewed by Moriaki Ota, deputy manager of news for Nikkei Net, the official Internet news service of Tokyo's Nikkei newspaper. A translation of the article follows:
IIC Partners Board Chair, Martine Bournerias speaks on “trans-border recruitment, a key element of business management” (March 5, 2007)
With the global market upswing, high calibre talents are in demand everywhere, as evidenced by the active managerial/executive search business. Baby boomers are approaching retirement changing labor market dynamics, and work values of the younger generations are driving labor market mobility.
Martine Bournerias, board chair of IIC Partners, a global network of independent search firms, shares her views on today’s search business trends.
◆――Tell us about the current search business climate on the global scale.
In 2005, revenues of the world’s top 20 search business firms increased by 16 per cent year-on-year. This is a striking growth rate compared to the years 2000 through 2003. The world economy expansion is giving rise to a growing demand in human resources. This is especially true in Europe, more notably, in the former communist countries and the Asian regions.
Behind this growing demand in the former communist countries lies the EU (European Union) expansion and its establishment of manufacturing and distribution in these countries. Previously known as industrial countries prior to the war, these former communist countries have the industrial infrastructure, allowing EU to outsource its businesses. However, they lack the human resources befitting an executive to run their operations.
For example, crude oil and gas industries are showing rapid growth in Russia. There are cases where an executive “who can deal with the west” may be recruited with double or triple the remuneration of one’s ex-employment.
In Asia, there is a high demand for resources in China and India. Both are breeding grounds for entrepreneurial, high caliber talents, and search business is expected to grow in these countries.
◆――And amid this situation, IIC Partners has formed an alliance with independent search firms, creating a global network.
IIC Partners’ 2005 revenues exceeded 107 million dollars. This 38 per cent year on year growth is approximately double that of the industry growth rate. Our 2006 growth rate is expected to be 20.8 per cent. This January, we plan to add a new location in Bucharest; we will also continue to reinforce our executive search business in the former communist bloc.
The partners of IIC are locally established and well represented firms. Local firms have a better grasp of the cultural aspects and local needs. IIC Partners now has 63 offices in over 40 countries. In Asia, we have five offices in China, and four in India.
More recently, there is a growing trend in trans-border assignments. IIC’s global network provides each partner firm with the ability to contact executive candidates around the world. Being able to select sources across borders is a tremendous advantage.
◆――In Japan, a huge cadre of baby boomers are approaching retirement, and there is a concern of how much impact this may have. At the same time, work values are changing and more people are job-hopping and starting businesses.
One must consider the changes in demographic composition in accounting for a greater search demand. A little over sixty years have passed since the end of World War II. This means that the business people leading the post-war economy are beginning to retire. The baby boomer generation amounts to a large portion of the population in advanced industrial countries. That combined with smaller trailing generations indicates a smaller talent pool for searches. Resource shortage is especially serious in the forty-year-olds generation.
◆――So, for companies, recruiting high caliber talent is a matter of life or death.
The population issue in total is a critical situation for corporate management. Even though companies are working on talent development for managerial positions, they are increasingly asking search firms to recruit talents with expertise.
With the stronger economy on its tailwind, more companies will continue to expand, and more will turn to search firms for executive recruitments. Once trans-border assignments become more common, demand for search firms with global reach will become even higher in the future.
◆――In Japan, the baby boomer generation has started to retire en masse. We also see more changes in work values, as indicated by the easing of job-hopping fears.
With the recent collapse of the lifetime employment system in Japan, younger generations are actively changing jobs and setting up businesses. Coupled with the en masse retirement of the baby boomers, companies are worried about securing talented resources. This mobility is not limited to Japan, but is a universal trend among developed economies. Advancement of corporate restructuring and outsourcing back in the 1990’s has largely changed the employee’s mindset regarding job and employment.
◆――Do economic and social dynamics dictate the type of talents that may be required?
Currently, there is a higher demand for “multi-experienced talents”. Having market knowledge goes without saying; the person must have knowledge on compliance, care about the environment, and possess high ethical and moral values. Diverse risk management capability is also required.
We see more assignments looking for expertise in corporate trade secret protection or compliance, which we hadn’t seen much in the past. Especially after 9.11, more companies are interested in securing experts for data and asset protection. This is a relatively new practice area for search firms, but a higher demand can be expected in the future.
◆――What are the prospects for search firms in the future?
Last year in October, IIC celebrated its 20th anniversary in Rio de Janeiro. Who would’ve thought that search demand would be so high in BRICs today? This is but an indication of the changes happening in the global search market.
As we move forward, Middle Eastern countries are the new markets to pioneer. These countries have people with extensive experience in crude oil and gas businesses. As a matter of fact, I was just in Istanbul the other day looking for a potential partner, and I feel that the needs will be greater in the future. Being able to “find the best resource anywhere” will become a key element of business management.
About Marine Bournerias:
Graduated from the Institut d’Etudes Politiques with a major in economics and finance; earned a diploma in strategic management from HEC Management/CESA.
Martine worked in the insurance industry prior to entering the search industry and becoming an equity partner of Progress in 1986. She has been instrumental in directing recent IIC growth in Europe, including the membership of strategically placed new offices. Martine was appointed Board Chair of IIC Partners in October 2006. In her spare time, Martine enjoys the opera.
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Infrastructure
