Korn Ferry is a management consulting firm headquartered in Los Angeles. It was founded in 1969. It specializes in organizational strategy, executive search, recruitment process outsourcing, succession management, leadership development and rewards consulting.
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History
1969-1972
The firm was founded in 1969 by Lester Korn and Richard Ferry. The two first met in 1962, when they worked for Los Angeles accounting firm--Peat, Marwick, Mitchell. Before leaving to form Korn Ferry, the two made partner at the firm.
Initial public offering in 1972
In 1972 the firm went public with an IPO and within two years (1974) had acquired all outstanding shares to become private again.
Acquisitions (1973-1991)
In the 1970s Korn Ferry expanded internationally by a combination of acquiring small to medium-sized enterprises and setting up subsidiaries of Korn Ferry International. An example being the formation of Tokyo, Japan based Korn Ferry International Japan in 1973.
With the opening in 1975 of Korn Ferry International Singapore the company had 41 offices in 20 countries.
Two years later in 1977 acquired the Mexico City firm Hazzard & Associados. The next year in 1978 they opened offices in Malaysia and Hong Kong and acquired the UK firm John Stork. In 1979 they acquired Australian-based Guy Pease Associates.
By 1981, the company was the largest executive search firm in the world, with Lester Korn serving as Chairman and CEO.
In 1987 Korn Ferry opened an office in Bangkok, Thailand with a footprint of 37 offices in fifteen countries servicing around 1,250 client corporations and organizations.
In 1989, the firm's revenues exceeded $100 million equivalent to ($197 million in 2015) for the first time.
Change in leadership (1991)
On May 10, 1991 Lester Korn retired as chairman with Richard Ferry then president and CEO assuming the additional role of chairman.
Reflective of 1991 executive-recruiting firms' economic outlook in the face of corporate clients successfully arrangements of lower fees, added services without cost, and industry trend of search firms being used less; Richard Ferry implemented cut costs through office closing and redundancies.
Under Richard Ferry, Korn Ferry in 1993 acquired and merged its European operations into Carre Orban and Partners that was branded in Europe as Korn/Ferry Carre/Orban International.
Korn Ferry opened their first office in India (1994), China (1995), Indonesia (1996), and South Korea (1998).
Beginning in 1992 Korn Ferry implemented a video-conferencing system to speed up the screening of job candidates.
In what was reported as increased competition in the management-consulting industry in 1995 Korn Ferry sold its organizational-consulting practice and executive-pay consulting firm.
In 1999 they acquired the German firm Hofman Herbold and separately the Australian firm Amrop International for $3.8M ($5.58 million in 2015) In 2000 acquiring the London-based PA Consulting Group for an estimated $35M ($49.7 million in 2015). In 2000 they purchased Boston-based search firm specializing in financial services Westgate Group.
In May 2000 Korn Ferry acquired Pratzer & Partners Inc. a Canada-based boutique executive recruiting firms.
Redundancies in the 2001 contraction
Amongst an executive-search industry contraction during 2000 Korn Ferry's 2001 redundancies were "more dramatic than those of competitors who aren't publicly traded" such as Spencer Stuart and Russell Reynolds Associates. The greater reductions were reported and attributed to having "expanded so heavily during the technology boom" coupled with Korn Ferry's new CEO Paul C. Reilly choosing to "send a message to shareholders."
Acquisitions and diversification (2001-2015)
In 2001 they purchased Levy Kerson, Helstrom Turner & Associates a search firm specializing in the retail and fashion industry, and Pearson, Caldwell, and Farnworth a search firm specializing in the financial services industry. In 2005 Korn Ferry moved their regional head office to Shanghai, China with a footprint of 73 offices in forty countries. In 2006 Korn Ferry acquired leadership development tools firm Lominger International of Golden Valley for $24M ($29.1 million in 2015) in a move to diversify Korn Ferry's product offerings beyond recruitment.
In 2007 Gary Burnison became CEO and continued the push to expand Korn Ferry from a recruitment centric into a retention-and-development firm that saw in the previous year the acquisition as Lominger International. Burnison's first such purchase was LeaderSource in 2007; the privately held 25 employee Minneapolis based executive-coaching firm founded in 1986 by Kevin Cashman with 2006 revenues of USD $3.5M ($4.25 million in 2015). In 2008 Korn Ferry acquired Lore International Institute. In June 2009, Korn Ferry acquired the London-based executive search firm Whitehead Mann. In 2010 it acquired Sensa Solutions. In 2013 Korn Ferry completed its acquisition of Minneapolis-based PDI Ninth House for $80M. In 2015 Korn Ferry also acquired Pivot Leadership.
Acquisition of Hay Group (2015)
In September 2015, Korn Ferry acquired Hay Group, a human resources consultancy firm. As part of the deal, worth a reported $452 million in cash and stock, Korn Ferry bundled its Leadership and Talent Consulting advisory business with Hay Group, creating a 7,000 person human resources advisor.
Maps Korn Ferry
Corporate affairs
As of 2018, Korn Ferry employed 7,643 people worldwide.
Litigation
In 2005 Korn Ferry accused one of its former star recruiters, David Nosal, stealing confidential client data to establish his own competing firm. In 2008 Nosal was charged under the Computer Fraud and Abuse Act (CFAA) noting that he "acted "without authorization" in violation of the law." In 2016 the US court of appeals from the ninth circuit ruled in United States v Nosal in Korn Ferry's favor that Nosal's "activity now constitutes a criminal act, under the Computer Fraud and Abuse Act (CFAA)."
Current operations
In 2018 Korn Ferry took a one-time, non-cash intangible asset impairment charge of $106 million, or $79 million on an after-tax basis, to account for rebranding its entire business simply as "Korn Ferry," and sunsetting all the Company's sub-brands, including Futurestep, Hay Group and Lominger, among others.
Korn Ferry Executive Search
The business is managed by geographical region leaders with a focus on recruiting board-level, chief executive and other senior executive positions for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare provider, technology and educational/not-for-profit market sectors. Since the firm's inception, it has conducted over 100,000 senior-level searches, and placed about seventy thousand managers.
Korn Ferry Advisory
The September 2015 purchase of the privately held HR "global management consultancy" Hay Group for $452M expanded the scope of services for clients. The acquisition and expansion redefined the firm from one focused on recruitment to a retention and development firm. The Hay Group purchase added 3000 employees on top of Korn Ferry 4,000 resulting in 7,000 headcount. The business has multiple offerings across assessment and succession, leadership development, organizational strategy, and rewards and benefits.
Korn Ferry RPO and Professional Search
In August 1998, Korn Ferry partnered with the Wall Street Journal to start the internet venture Futurestep.com, which was utilized to help candidates at the middle management level specifically find positions to advance their career.
Korn Ferry went public in 1998 to finance Futurestep.com and its digital jobs initiatives to "maintain its industry dominance."
Describing the largest executive search firm in the world as "latecomers are as green as the next start-up" Crain's New York Business reported on Korn Ferry's move into the "ultracompetitive market" of tech recruitment in 1999 with the Korn Ferry launch of the internet venture FuturestepAT.com specifically targeting "advanced technologists," to compete against small boutiques executive search firms such as Redwood Partners and Silicon Alley Connections that have "carved out niches and built strong reputations" focused on technology hires. The nature of the tech field is one "where the skills needed can change dramatically from month to month". Fee structure for FuturestepAT was reported as unchanged from its parent Korn Ferry's "one-third of the first year's salary."
By 2001 Futurestep had been rolled out to 22 countries with worldwide losses of $60 million since beginning in May 1998 with $23M in the nine months to Jan 31, 2001.
Korn Ferry is known for its "headhunting technology".
Corporate structure
In February 1999 Korn Ferry IPOed on the New York Stock Exchange.
Gary Burnison, a former partner of KPMG, serves as the current CEO.
Corporate culture
References
External links
- Korn Ferry website
Source of article : Wikipedia
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