I was in the executive recruiting industry during the Savings and Loan meltdown during 1990 through 1991
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Charlotte, NC (PRWEB) October 13, 2009
Frank G. Risalvato who has been providing global executive recruiting services since 1987 is seeing unique trends surfacing as a result of his daily conversations with corporate leaders of both publicly traded and privately held large and medium-sized companies.
"I was in the executive recruiting industry during the Savings and Loan meltdown during 1990 through 1991" says Risalvato, "and am now noticing disturbing trends that will trump even that pivotal economic event in our history".
Risalvato, who founded his own firm Inter-Regional Executive Search speaks to chief executive officers, presidents, senior vice presidents and other leaders of a wide variety of companies on a daily basis. His firm recruits for companies ranging from consumer product, manufacturing, pharmaceutical and insurance organizations. Where he is spotting the next dominoe wave however, is within the insurance industry.
"The emphasis in all the headlines seems to be fixed upon the banking sector" he states. "But the insurance industry in particular is suffering pain that could soon lead to sweeping changes of the insurance industry landscape" he adds.
And that's not taking any of the health care reform initiatives into consideration which would have further sweeping impact on the health insurance sub-sector of the industry.
"Insurance companies are uniquely sensitive to economic downturns, particularly when equities experience a steep decline as they have this past year. Because insurance companies fall under state and other governmental regulating bodies, they are required to maintain a certain percentage of reserve funds in comparison to their insurance exposure" he states.
He is hearing of many smaller companies privately hinting it may be time to find suitors as they are tiring of swimming upstream while the current is taking these companies downward. Some are ready to hang it up and if they don't find buyers they may liquidate if replenishing capital continues to become problematic.
"More than a few companies are telling me they are very worried. A few have been quietly approached by state governmental agencies that are trying to avoid publicity. In some cases management has done all it can … lowered insurance premium to generate more sales ... work out arrangements with brokers ... but that only goes so far. Some don't know how long they can hang on. In a particular vulnerable position are a few regional carriers whose numbers are under pressure despite management's efforts."
Risalvato is hearing similar lamenting from independent insurance agents around the country. Some are seeking early retirement and divestiture of their companies as fighting the fight has become exhausting.
"It is disheartening when you call a president or CEO of a company where he or she spent twenty-five years to build up brand recognition, and that same person asks if we can find someone to 'buy us out' while there is still value left in the company."
Instead of wanting to discuss hiring with Mr. Risalvato and his team of recruiters, a number of companies in the sector are asking to find potential suitors while there is still value remaining in the company. His firm is acting more in a merger and acquisition capacity in those instances than a traditional recruiting firm.
"There will be consolidations, mergers and some companies we've become familiar with may soon cease to exist" predicts Risalvato. The good news however, is that well-managed and well-capitalized smaller and more nimble companies are taking advantage of conditions to ramp up both hiring as well as acquiring. "Fortunately there are plentiful companies in a good position nationally and are preparing for the unavoidable upturn". he concludes.
Deb Lynn, Vice President of Operations
Inter-Regional Executive Search (IRES, Inc)
1414 Mallory Ln. Charlotte (Waxhaw) NC (Offices in Pittsburgh and Hackensack, NJ)