The number of searches for financial services executives was flat compared with the preceding quarter, but down 7.2 percent from the first quarter of 2007. The technology sector was also down year over year, falling 5.1 percent.

Financial services is typically the largest executive search sector, but it dropped to second during the quarter with a 22 percent market share, trailing the industrial sector’s 24 percent.

Searches for manufacturing executives saw the biggest year-over-year gain, at 10.1 percent.

Overall global executive searches were up 9 percent from the fourth quarter of 2007. Year over year, they were up 1.4 percent. And industry revenue was up 13.2 percent year over year. Other yearly increases included a 5.5 percent rise in average revenue per search consultant and a 15.5 percent increase in average fee per assignment.

Les Stern, a partner in New York executive search firm Heidrick & Struggles who specializes in the financial sector, has seen dips in the sector last as long as three years and as short as a few months. He wouldn’t speculate how long this one might last.

“Whenever there is an economic downturn, the financial sector consistently goes through downsizing,” Stern says, with cuts made quickly. Then firms often find themselves suddenly shorthanded. Cuts in financial services typically are corrective actions caused by handing out “careless credit,” he adds.

The financial sector is so broad-based, Stern says, that the downturn of demand for executive searches within it cannot be pegged to trouble in one part, such as the mortgage industry. But he says Wall Street-based investment banks are the ones taking the biggest hits.

Paul Heller, president and founding partner of New York-based executive search firm Cromwell Partners, says many financial services companies are retooling their ways of doing business in reaction to meltdowns in the industry.

“As a result, they’re looking for different kinds of people than they’ve looked for in the past,” says Heller, noting that people with risk management and valuation skills are now in demand.

Peter Felix, president of the Association of Executive Search Consultants, agrees.

“While there have been very few searches in investment banking, capital markets and real estate, there is still a need for executives in private banking, asset management, private equity and insurance,” he says.

In this kind of climate, financial sector companies “tend to go for quality players” and hire the long-established executive search companies to fill their top jobs, Stern says.

The quarterly survey showed other executive search industry sectors maintained their market shares for the first quarter. Consumer products had 18 percent of the market, technology 15 percent, life sciences/health care 11.5 percent, nonprofits 6 percent and profes- sional services 3 percent.

—Mark Larson