Building a Diversified Advisory Business Beyond Executive Search
Reached $94.3M in consulting revenue in 2023 by expanding advisory beyond executive search.
Heidrick & Struggles, a Large Enterprise Staffing & Recruitment company, created value through Customer Mix Shift.
Through 2020, Heidrick & Struggles was primarily an executive search firm generating $621.6 million in net revenue, with executive search as its primary revenue source. The firm's client relationships were largely episodic — a CHRO or board would engage Heidrick for a single C-suite hire, then the relationship would go dormant until the next opening. The company had a small leadership consulting practice (Heidrick Consulting) that generated $56.4 million in 2020 and employed 65 consultants, but it was not a strategic growth engine. The firm faced commoditization pressure from boutique search firms and in-house executive recruiting teams, particularly for positions below the C-suite. With no recurring revenue streams and full dependence on cyclical search activity, revenue had declined sharply during the COVID downturn.
Starting in 2021, Heidrick executed a deliberate pivot to build recurring, non-search revenue streams alongside its core executive search business:
| Metric | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| Heidrick Consulting revenue | $56.4M | $67.6M | $80.2M | $94.3M (+17.6%) |
| On-Demand Talent revenue | — | $66.6M (partial) | $91.3M | $152.5M (+66.9%) |
| Non-search revenue share | — | 13.4% | — | 24.0% |
| Executive Search revenue | — | — | — | $780.0M (-13.5%) |
| Total net revenue | $621.6M | $1,003.0M | $1,073.5M | $1,026.9M |
| Consulting headcount | 65 | 69 | 70 | 89 (+37%) |
Heidrick's core problem before the pivot was client relationship structure: a CHRO or board chair engaged the firm for a C-suite search, the engagement concluded, and the relationship went dormant until the next opening — which might be two to five years away. The On-Demand Talent acquisition (Business Talent Group, April 2021) and Heidrick Consulting expansion were both aimed at the same problem: converting the existing C-suite relationship into a recurring touchpoint rather than a periodic transaction.
On-Demand Talent is the more commercially important move. Growing from $66.6M in its first partial year to $152.5M in 2023 — a 66.9% single-year increase — it created an engagement model where clients who had hired through Heidrick could now access interim executive and independent consultant placements on shorter cycles. The same relationship that generated a $150,000 search fee could now generate ongoing interim placement fees at lower average ticket but much higher frequency.
The FY2023 numbers reveal both the value and the limit of the strategy. Total net revenue declined to $1,026.9M as Executive Search fell 13.5% amid market softness — demonstrating that even with non-search at 24.0% of revenue, Heidrick remains predominantly a search firm subject to hiring cycle volatility. The advisory segments are not yet large enough to fully buffer a sharp search contraction. The direction is structurally correct; the question is whether the mix can reach 40–50% non-search before the next significant hiring freeze.
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