Korn Ferry is a management consulting firm headquartered in Los Angeles, California. It was founded in 1969 and as of 2019, operates in 111 offices in 53 countries and employs 8,198 people worldwide.[4] Korn Ferry operates through four business segments: Consulting, Digital, Executive Search, Recruitment Process Outsourcing and Professional Search.[4]
History
Korn Ferry 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.[5]
In 1969 the firm went public with an initial public offering (IPO), but in 1974 reacquired all outstanding shares to become private again.[6] In 1973 Korn Ferry formed Tokyo, Japan-based Korn Ferry International Japan.[7] With the opening in 1975 of Korn Ferry International Singapore, the company had 41 offices in 20 countries.[8] In 1977 they acquired the Mexico City firm Hazzard & Associados. In 1978 they opened offices in Malaysia[9] and Hong Kong, and acquired the UK firm John Stork. In 1979 they acquired Australian-based Guy Pease Associates.[10]
In 1981 the company became the largest executive search firm in the world, with Lester Korn serving as Chairman and CEO.[11] In 1987 the firm opened an office in Bangkok, Thailand. They then had 37 offices in fifteen countries servicing around 1,250 client corporations and organizations.[12] In 1989, the firm's revenues exceeded $100 million for the first time.[13]
In May 1991 Lester Korn retired as chairman and Richard Ferry, the president and CEO, assumed the additional role of chairman.[13] Following this, the firm initiated several office closures.[14] In 1992 Korn Ferry implemented a video-conferencing system for screening job candidates.[15] In 1993, the firm acquired Carre Orban and Partners and merged its European operations into a firm branded in Europe as Korn/Ferry Carre/Orban International.[16] In the next five years, the firm opened their first offices in India (1994), China (1995), Indonesia (1996), and South Korea (1998).[17]
In August 1998,[18] Korn Ferry partnered with The Wall Street Journal to start Futurestep.com, aimed at the middle management level.[19][20] By 2001 Futurestep had been rolled out to 22 countries; it incurred worldwide losses of $60 million through January 31, 2001.[21]
In 1999 Korn Ferry acquired the German firm Hofman Herbold and the Australian firm Amrop International.[22] In 2000 it acquired the London-based PA Consulting Group for an estimated $35M. In 2000 it purchased Boston-based financial services search firm Westgate Group,[23] and Canada-based Pratzer & Partners Inc.[24]
During an executive-search industry contraction, 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. This was 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."[25]
In 2001 Korn Ferry purchased Levy Kerson, Helstrom Turner & Associates, and Pearson, Caldwell, and Farnworth.[26] In 2005 the firm moved its regional head office to Shanghai, China,[17] and had a total of 73 offices in forty countries. In 2006 Korn Ferry acquired leadership development tools firm Lominger Limited of Golden Valley for $24M.[1]
In 2006 the company acquired Lominger International, and in 2007 Gary Burnison became the company's new CEO.[1][27][28] That year the company acquired LeaderSource.[27] In 2008 they acquired Lore International Institute, and in June 2009, they acquired the London-based Whitehead Mann.[29] In 2010 they acquired Sensa Solutions, in 2013 Korn Ferry completed its acquisition of Minneapolis-based PDI Ninth House for $80M;[30] in 2015 they acquired Pivot Leadership[31] and Hay Group.[32]
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.[33]
According to a list maintained by the Yale School of Management, in March 2022, the company continued to do business in Russia despite a widespread boycott after the Russian invasion of Ukraine.[34] In April 2022, the company suspended its operations in Russia. [35]
Korn Ferry has implemented significant workforce reductions during challenging economic periods:
2001: Amid an industry downturn, Korn Ferry reduced its workforce by 20%. This action was notably more substantial than those of its privately held competitors, such as Spencer Stuart and Russell Reynolds Associates. The firm had expanded significantly during the technology boom, and the new CEO, Paul C. Reilly, aimed to convey a message to shareholders through these cuts.[36]
2023-2024: In response to a challenging macroeconomic environment characterized by inflation, rising interest rates, and global uncertainties, Korn Ferry announced plans to eliminate approximately 8% of its workforce over a 6-8 month period in 2023-2024. This reduction was expected to decrease the company's annualized cost base by $110 million to $120 million.[37]
These instances highlight Korn Ferry's strategic, yet controversial responses to economic pressures, involving workforce reductions to manage costs to satisfy shareholders in short term.
Whitehead Mann
Whitehead Mann was a London-based executive search firm that was acquired by Korn/Ferry International in June 2009.[38]
Whitehead Engineering was founded by Clive Whitehead, who on marriage merged his firm with that of his wife's, the psychologist Anna Mann (Mann Recruitment), to form Whitehead Mann in the 1970s. The firm listed on the AIM part of FTSE in 1997. By 2003 the company had market capitalisation of £33 million mainly through acquisition, with offices in London, Paris, Frankfurt, Hong Kong and New York; together with training and advisory divisions.[citation needed]
During the dot.com boom, the firm's fortunes climbed and fell. After strategy disagreements with new CEO Gerard Clery-Melin, in 2003 Mann announced her decision to leave the firm, subsequently setting up MWM Consulting in 2004.[39][failed verification] In 2006, the company was subject of a £26 million management buyout, financed by investor Palladian Investors, a division of Och-Ziff. Carol Leonard subsequently took a six-month sabbatical as head of search, and then left the firm in February 2009.[40]
Litigation
In 2005 Korn Ferry accused one of its former star recruiters, David Nosal, of stealing confidential client data to establish his own competing firm.[41] In 2008 Nosal was charged under the Computer Fraud and Abuse Act (CFAA).[42] In 2016 the US 9th Circuit Court of Appeals ruled, in United States v Nosal, that Nosal's was a criminal act under CFAA."[42] In 2018 Nosal was ordered to prison.[43]
Sponsorship
On June 19, 2019, the PGA Tour and Korn Ferry announced they had entered a 10-year agreement making Korn Ferry the Umbrella Sponsor of the newly named Korn Ferry Tour, the developmental tour for the PGA. In replacing Web.com, Korn Ferry's sponsorship will extend through the 2028 season.[44] The Korn Ferry Tour will continue to award PGA Tour membership to the Tour's 50 leading players, including the top 25 from the Regular Season points list and the top 25 from the three-event Korn Ferry Tour Finals points list.[45]
Notable persons
Prith Banerjee (born 1960), Indian American academic and computer scientist
^Hilder, David B. (July 16, 1987). "Headhunter Gets Recruited for U.N. Post". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. p. N/A. Retrieved December 8, 2016.
^Kikuchiz, Seiichi (July 28, 1981). "Japanese Enterprise Also Begin to Make Use of Executive Search Firms". Japan: The Japan Economic Journal. The Nihon Keizai Shimbun. p. 15.
^Adversario, Patricia (May 18, 1992). "More S'pore Execs Becoming Expatriate Workers in Region". Singapore: The Straits Times.
^"Korn/Ferry Delighted With Appointment". Malaysia: The New Straits Times Press (M) Bhd. Media Prima. January 14, 1997.
^ ab"Korn/Ferry's Chief Adds Chairman Post". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. May 13, 1991. p. B10.
^Lublin, Joann S. (August 2, 1991). "Headhunters Seek Solution to Slowdown by Adding Services, Expanding Abroad". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. p. B1.
^Lublin, Joann S. (October 13, 1992). "Search Firm Puts Prospects in Focus". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. p. B1.
^The Economist, and Nancy Garrison Jenn. Headhunters and How to Use Them: A Guide for Organisations and Individuals. London, England : Profile Books. [1]
^ abSt. Anthony, Neal (January 10, 2007). "Korn/Ferry International to acquire LeaderSource; The purchase, in addition to one last year of Lominger International, broadens Korn/Ferry's areas of business". No. Metro Edition. Star Tribune (Minneapolis, MN).
^Weber, Lauren (December 9, 2014). "Here's What Boards Want in Executives". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. p. B5. Retrieved December 20, 2016.
