After nearly three decades leading Egon Zehnder’s Chilean operations, Luis José Garreaud has retired, marking a significant transition for one of the world’s largest executive search firms. Garreaud’s departure coincides with a period of increasing sophistication within the talent acquisition industry, where firms like egon zehnder-part of the “SHREK” group of leading search firms-navigate a competitive landscape and evolving client demands. His 30-year tenure saw the Chilean executive search market mature from reliance on personal connections to a more global and professionalized practice. This article draws on Garreaud’s insights into the current trends,challenges,and intricacies of identifying and recruiting top leadership talent.
After nearly three decades at the helm of Egon Zehnder’s Chilean office, Luis José Garreaud has stepped down, marking the end of an era for one of the world’s leading executive search firms. Garreaud, who interviewed an estimated 15,000 candidates throughout his career, retired October 31st, coinciding with the Swiss-based company’s fiscal year-end. The move comes as the executive search industry continues to evolve, becoming increasingly sophisticated in its approach to talent acquisition.
Garreaud joined Egon Zehnder in 1997 after a headhunter approached him about a role at Quilmes in Chile, a position he ultimately didn’t pursue. He quickly partnered with Luis Hernán Cubillos, and together they led the Chilean branch of Egon Zehnder for almost 30 years. Egon Zehnder, one of the “SHREK” firms – an acronym representing Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder, and Korn Ferry – operates under strict partnership guidelines, requiring partners to retire at age 62. Cubillos reached that age in 2023 but remains with the firm as a senior advisor.
The Chilean market for executive search has undergone significant professionalization during Garreaud’s tenure. “Companies have greatly professionalized the process of bringing on executives. It used to be based purely on connections. Today, it’s more open and global,” he said. The industry, he added, remains attractive due to its high margins and reliance on the quality of its recruiters.
Egon Zehnder’s clients, typically corporations, pay a fixed fee – often in installments, with a final payment contingent on a successful hire – or a percentage of the position’s annual salary, generally between 25% and 30%. The fee is always paid by the company, never the candidate. “The executive is part of the transaction,” Garreaud explained. A key benefit for clients is a guarantee: if a placed executive leaves within a year, the search for a replacement is conducted at no additional cost.
Garreaud described the industry as “super competitive,” noting the presence of over 400 executive search firms in Chile, ranging from large international players like Egon Zehnder to smaller firms operating with limited resources. Resilience is a crucial trait for headhunters, as candidates frequently receive counteroffers from their current employers when a new opportunity arises. “The deal isn’t done until it’s done – it never burns before it reaches the oven. And you have to start from scratch again,” he said.
Following his departure from Egon Zehnder, Garreaud plans to focus on several board positions and potentially add others. He has served on the board of Empresas Sutil for eight years, alongside Alejandro Quesney, Hernán Garcés, César Barros, Luis José Larraín, and Juan Sutil, the controlling shareholder and his brother-in-law. He also sits on the board of a family office and has collaborated with educational foundations. This week, Garreaud registered as a director eligible for election by pension funds (AFPs) in the companies they invest in, a move that echoes Egon Zehnder’s early work in identifying professional candidates for AFPs in the early 2000s.
Trends
Garreaud proudly stated, “We either conducted every relevant CEO search or, in the vast majority of cases, were called in to do so.” Over nearly three decades, he has built a substantial network of potential candidates and gained insight into the pulse of the Chilean economy through ongoing conversations with executives and directors. “I started with phone books,” he recalled.
The initial step involves understanding the client’s needs – the desired candidate profile, industry experience, required skills, and international exposure. “The client’s list of attributes is often like a grocery list,” he noted.
The next phase is identifying the ideal candidate, which comes with certain restrictions. Firms avoid approaching individuals already hired by competitors, poaching executives undergoing coaching or assessments (another service offered by Egon Zehnder), or competing in parallel searches. “I can’t recruit a finance manager for Falabella and Cencosud at the same time,” he explained.
Egon Zehnder has successfully placed executives such as former Colbún General Manager Thomas Keller, Softys (CMPC) General Manager Gonzalo Darraidou, former Banchile Brokerage General Manager Hernán Arellano, and Codelco Executive President Rubén Alvarado. The firm also participated in the search processes for the current CEOs of Latam, Roberto Alvo, and Falabella, Alejandro González, though both companies ultimately selected internal candidates after considering external options. “That’s safer and faces less resistance from the board, especially when the company is performing well,” Garreaud explained.
Long before that, in the late 1990s, the firm led another prominent search – the recruitment of the so-called “dream team” of executives for Quiñenco – a direct request from then-President Guillermo Luksic and General Manager Francisco Pérez Mackenna. “At that time, perhaps the organization wasn’t sufficiently structured to absorb so many people. There were complex adjustment issues,” Garreaud said, reflecting on the outcome.
Search processes are becoming increasingly professional, but also more complex. “It’s difficult today to find good CEOs who are available to move to other companies,” he said, describing a situation of limited supply. “Companies have realized how complicated it is to replace a CEO, so they take care of them, pay them more, give them more responsibility, and even ownership in some cases.” Adding to the challenge is the demand for skills beyond academic qualifications. “The general manager steers the ship. Resilience, teamwork, listening, motivating, creating leadership, and having a diverse team – in terms of gender, race, style, and country – are all important,” he listed. “Everything is important, but soft skills are particularly important today.” Furthermore, executive turnover is higher than in the past, when a general manager might remain in their position for thirty years – a rarity today.
Companies are also increasingly seeking external professionals for their boards of directors. However, Garreaud attributes growing difficulties to increased risks imposed by successive laws, including criminal penalties. “Some people tell me they’re not interested in being a director of any publicly traded company due to the restrictions,” he revealed. The incorporation of women onto boards, once challenging 15 years ago due to a lack of qualified female candidates, is also evolving. “I’m a friend of quotas, but as a suggestion, not an obligation,” he stated.
What was the most challenging recruitment? Garreaud didn’t disclose specific cases but described a recurring scenario: when family-owned businesses seek their first professional general manager. “Handing over the keys to the Mercedes Benz to a third party is difficult,” he compared. He once told a client that experience indicated the second general manager always performed better – the first struggled and didn’t last long, but both the executive and the family owners learned valuable lessons. “The second comes to work on ground that is already somewhat tilled,” he said. The owner responded, “Then bring me the second candidate, not the first.”
