10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

OR

 ☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 0-25837

HEIDRICK & STRUGGLES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	36-2681268
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

233 South Wacker Drive-Suite 4900

Chicago, Illinois

60606-6303

(Address of Principal Executive Offices)

(312) 496-1200

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock, $0.01 par value	HSII	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	☒
Non-Accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 21, 2023, there were 20,027,637 shares of the Company’s common stock outstanding.

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX

		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2022	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	4
	Unaudited Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 6.	Exhibits	30
	SIGNATURE	31

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

	March 31, 2023		December 31, 2022
	(Unaudited)
Current assets
Cash and cash equivalents	$	204,691	$	355,447
Marketable securities	—		266,169
Accounts receivable, net of allowances of $7,248 and $6,643, respectively	160,092		126,437
Prepaid expenses	31,529		24,098
Other current assets	42,830		40,722
Income taxes recoverable	7,190		10,946
Total current assets	446,332		823,819
Non-current assets
Property and equipment, net	32,517		30,207
Operating lease right-of-use assets	69,589		71,457
Assets designated for retirement and pension plans	11,479		11,332
Investments	42,547		34,354
Other non-current assets	31,666		25,788
Goodwill	197,711		138,361
Other intangible assets, net	25,263		6,333
Deferred income taxes	34,361		33,987
Total non-current assets	445,133		351,819
Total assets	$	891,465	$	1,175,638
Current liabilities
Accounts payable	$	16,975	$	14,613
Accrued salaries and benefits	140,056		451,161
Deferred revenue	43,345		43,057
Operating lease liabilities	20,584		19,554
Other current liabilities	33,318		56,016
Income taxes payable	5,896		4,076
Total current liabilities	260,174		588,477
Non-current liabilities
Accrued salaries and benefits	48,138		59,467
Retirement and pension plans	56,882		48,456
Operating lease liabilities	60,851		63,299
Other non-current liabilities	36,778		5,293
Deferred income taxes	7,530		—
Total non-current liabilities	210,179		176,515
Total liabilities	470,353		764,992
Commitments and contingencies (Note 18)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at March 31, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value, 100,000,000 shares authorized, 20,037,959 and 19,866,287 shares issued, 20,027,637 and 19,861,207 shares outstanding at March 31, 2023 and December 31, 2022, respectively	200		199
Treasury stock at cost, 10,322 and 5,080 shares at March 31, 2023 and December 31, 2022, respectively	(354)		(191)
Additional paid in capital	244,341		246,630
Retained earnings	180,671		168,197
Accumulated other comprehensive loss	(3,746)		(4,189)
Total stockholders’ equity	421,112		410,646
Total liabilities and stockholders’ equity	$	891,465	$	1,175,638

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

1

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Revenue
Revenue before reimbursements (net revenue)	$	239,317	$	283,861
Reimbursements	2,802		1,676
Total revenue	242,119		285,537
Operating expenses
Salaries and benefits	158,859		201,445
General and administrative expenses	34,327		29,794
Cost of services	22,832		17,988
Research and development	5,528		4,402
Reimbursed expenses	2,802		1,676
Total operating expenses	224,348		255,305
Operating income	17,771		30,232
Non-operating income (expense)
Interest, net	3,249		110
Other, net	1,809		(2,471)
Net non-operating income (expense)	5,058		(2,361)
Income before income taxes	22,829		27,871
Provision for income taxes	7,243		9,404
Net income	15,586		18,467
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	402		(1,082)
Net unrealized gain on available-for-sale investments	41		—
Other comprehensive income (loss), net of tax	443		(1,082)
Comprehensive income	$	16,029	$	17,385
Weighted-average common shares outstanding
Basic	19,904		19,624
Diluted	20,569		20,511
Earnings per common share
Basic	$	0.78	$	0.94
Diluted	$	0.76	$	0.90
Cash dividends paid per share	$	0.15	$	0.15

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except per share amounts)

(Unaudited)

							Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	19,866	$	199	5	$	(191)	$	246,630	$	168,197	$	(4,189)	$	410,646
Net income	—	—		—	—		—		15,586		—		15,586
Other comprehensive income, net of tax	—	—		—	—		—		—		443		443
Common and treasury stock transactions:
Stock-based compensation	—	—		—	—		1,853		—		—		1,853
Vesting of equity awards, net of tax withholding	172	1		—	—		(4,142)		—		—		(4,141)
Clawback of equity awards	—	—		5	(163)		—		—		—		(163)
Cash dividends declared ($0.15 per share)	—	—		—	—		—		(3,006)		—		(3,006)
Dividend equivalents on restricted stock units	—	—		—	—		—		(106)		—		(106)
Balance at March 31, 2023	20,038	$	200	10	$	(354)	$	244,341	$	180,671	$	(3,746)	$	421,112

							Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	19,597	$	196	5	$	(191)	$	233,163	$	101,177	$	1,675	$	336,020
Net income	—	—		—	—		—		18,467		—		18,467
Other comprehensive loss, net of tax	—	—		—	—		—		—		(1,082)		(1,082)
Common and treasury stock transactions:
Stock-based compensation	—	—		—	—		3,698		—		—		3,698
Vesting of equity awards, net of tax withholding	126	1		—	—		(3,220)		—		—		(3,219)
Cash dividends declared ($0.15 per share)	—	—		—	—		—		(2,940)		—		(2,940)
Dividend equivalents on restricted stock units	—	—		—	—		—		(179)		—		(179)
Balance at March 31, 2022	19,723	$	197	5	$	(191)	$	233,641	$	116,525	$	593	$	350,765

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months ended March 31,
	2023		2022
Cash flows - operating activities
Net income	$	15,586	$	18,467
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	3,873		2,620
Deferred income taxes	6,669		(477)
Stock-based compensation expense	1,853		3,698
Accretion expense related to earnout payments	191		271
Gain on marketable securities	(1,645)		—
Loss on disposal of property and equipment	130		167
Changes in assets and liabilities:
Accounts receivable	(24,332)		(53,142)
Accounts payable	(1,137)		(4,156)
Accrued expenses	(325,975)		(227,424)
Deferred revenue	147		4,137
Income taxes recoverable and payable, net	(3,083)		5,028
Retirement and pension plan assets and liabilities	6,070		3,497
Prepaid expenses	(7,135)		(9,081)
Other assets and liabilities, net	(8,243)		(5,801)
Net cash used in operating activities	(337,031)		(262,196)
Cash flows - investing activities
Acquisition of business, net of cash acquired	(29,907)		—
Capital expenditures	(3,808)		(1,804)
Purchases of marketable securities and investments	(6,172)		(5,011)
Proceeds from sales of marketable securities and investments	267,965		763
Net cash provided by (used in) investing activities	228,078		(6,052)
Cash flows - financing activities
Cash dividends paid	(3,112)		(3,119)
Payment of employee tax withholdings on equity transactions	(4,141)		(3,219)
Acquisition earnout payments	(35,946)		—
Net cash used in financing activities	(43,199)		(6,338)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	1,396		(2,671)
Net decrease in cash, cash equivalents and restricted cash	(150,756)		(277,257)
Cash, cash equivalents and restricted cash at beginning of period	355,489		545,259
Cash, cash equivalents and restricted cash at end of period	$	204,733	$	268,002

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All tables in thousands, except per share figures)

(Unaudited) 

1.    Basis of Presentation of Interim Financial Information

The accompanying unaudited Condensed Consolidated Financial Statements of Heidrick & Struggles International, Inc. and subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to estimates and assumptions include revenue recognition, income taxes, interim effective tax rate and the assessment of goodwill, other intangible assets and long-lived assets for impairment. Estimates are subject to a degree of uncertainty and actual results could differ from these estimates. In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at March 31, 2023 and December 31, 2022, the results of operations for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022 have been included and are of a normal, recurring nature except as otherwise disclosed. These financial statements and notes are to be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023.

2.    Summary of Significant Accounting Policies

A complete listing of the Company’s significant accounting policies is discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Revenue Recognition

See Note 3, Revenue.

Cost of Services

Cost of services consists of third-party contractor costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments.

Research and Development

Research and development (“R&D”) expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with the development of new technologies to enhance existing products and services and to expand the range of the Company's offerings. The benefits from the Company's R&D efforts are intended to be utilized to develop and enhance new and existing services and products across the Company's current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that the Company may embark upon in the future from time to time.

Marketable Securities

The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months.

Restricted Cash

The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of March 31, 2023 and 2022, and December 31, 2022 and 2021:

5

	March 31,				December 31,
	2023		2022		2022		2021
Cash and cash equivalents	$	204,691	$	267,986	$	355,447	$	545,225
Restricted cash included within other non-current assets	42		16		42		34
Total cash, cash equivalents and restricted cash	$	204,733	$	268,002	$	355,489	$	545,259

Earnings per Common Share

Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended March 31,
	2023		2022
Net income	$	15,586	$	18,467
Weighted average shares outstanding:
Basic	19,904		19,624
Effect of dilutive securities:
Restricted stock units	501		650
Performance stock units	164		237
Diluted	20,569		20,511
Basic earnings per share	$	0.78	$	0.94
Diluted earnings per share	$	0.76	$	0.90

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating Lease Right-of-Use Assets, Operating Lease Liabilities - Current and Operating Lease Liabilities - Non-Current in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately.

6

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance is intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company is currently evaluating the impact of this accounting guidance. The new guidance is not expected to have a material effect on the Company's financial statements.

3.    Revenue

Executive Search

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred.

The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred.

Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance.  Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months.

The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees.

On-Demand Talent

The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily

7

responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients.

Heidrick Consulting

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of the Company's consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project.

The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue.

Contract Balances

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Other current assets on the Condensed Consolidated Balance Sheets.

Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees.

Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts.

Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized.

8

The following table outlines the changes in the contract asset and liability balances from December 31, 2022 to March 31, 2023:

	March 31, 2023		December 31, 2022		Change
Contract assets
Unbilled receivables, net	$	13,322	$	13,940	$	(618)
Contract assets	20,164		21,348		(1,184)
Total contract assets	33,486		35,288		(1,802)
Contract liabilities
Deferred revenue	$	43,345	$	43,057	$	288

During the three months ended March 31, 2023, the Company recognized revenue of $28.5 million that was included in the contract liabilities balance at the beginning of the period. The amount of revenue recognized during the three months ended March 31, 2023 from performance obligations partially satisfied in previous periods as a result of changes in the estimates of variable consideration was $9.5 million.

Each of the Company's contracts has an expected duration of one year or less. Accordingly, the Company has elected to utilize the available practical expedient related to the disclosure of the transaction price allocated to the remaining performance obligations under its contracts. The Company has also elected the available practical expedients related to adjusting for the effects of a significant financing component and the capitalization of contract acquisition costs. The Company charges and collects from its clients sales tax and value added taxes as required by certain jurisdictions. The Company has made an accounting policy election to exclude these items from the transaction price in its contracts.

4.    Credit Losses

The Company is exposed to credit losses primarily through the provision of its executive search, consulting, and on-demand talent services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of clients' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for clients that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of clients' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

The activity in the allowance for credit losses on the Company's trade receivables is as follows:

Balance at December 31, 2022	$	6,643
Provision for credit losses	1,970
Write-offs	(1,374)
Foreign currency translation	9
Balance at March 31, 2023	$	7,248

9

There were no investments with unrealized losses at March 31, 2023. At December 31, 2022, the fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:

	Less Than 12 Months				Balance Sheet Classification
Balance at December 31, 2022	Fair Value		Unrealized Loss		Cash and Cash Equivalents		Marketable Securities
U.S. Treasury securities	$	194,056	$	56	$	11,918	$	182,138

The unrealized loss on one investment in U.S. Treasury securities at December 31, 2022 was caused by fluctuations in market interest rates. The contractual cash flows of these investments are guaranteed by an agency of the U.S. government. Accordingly, it is expected that the investments would not be settled at a price less than the amortized cost basis. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before the recovery of the amortized cost basis.

5.    Property and Equipment, net

The components of the Company’s property and equipment are as follows:

	March 31, 2023		December 31, 2022
Leasehold improvements	$	41,671	$	40,829
Office furniture, fixtures and equipment	14,531		14,322
Computer equipment and software	32,436		30,085
Property and equipment, gross	88,638		85,236
Accumulated depreciation	(56,121)		(55,029)
Property and equipment, net	$	32,517	$	30,207

Depreciation expense for the three months ended March 31, 2023 and 2022 was $2.0 million and $1.8 million, respectively.

6.    Leases

The Company's lease portfolio is comprised of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in the lease term.

As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company has a centrally managed treasury function and, therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment.

Office leases have remaining lease terms that range from less than one year to 10.3 years, some of which also include options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases.

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Equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 5.3 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio.

Lease cost components included within General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows:

	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	4,525	$	4,358
Variable lease cost	1,916		$	1,161
Total lease cost	$	6,441	$	5,519

Supplemental cash flow information related to the Company's operating leases is as follows for the three months ended March 31:

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,811	$	5,044
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,570	$	281

The weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, are as follows:

	2023		2022
Weighted Average Remaining Lease Term
Operating leases	6.3 years		6.3 years
Weighted Average Discount Rate
Operating leases	3.49	%	3.25	%

The future maturities of the Company's operating lease liabilities as of March 31, 2023, for the years ended December 31 are as follows:

	Operating Lease Maturity
2023	$	14,468
2024	19,988
2025	12,448
2026	10,926
2027	8,311
Thereafter	24,693
Total lease payments	90,834
Less: Interest	9,399
Present value of lease liabilities	$	81,435

7.    Financial Instruments and Fair Value

Cash, Cash Equivalents and Marketable Securities

The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets until realized.

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The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:

	Cash and Cash Equivalents
Balance at March 31, 2023
Cash	$	154,519
Level 1(1):
Money market funds	50,172
Total Level 1	50,172
Total	$	204,691

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Balance at December 31, 2022
Cash									$	247,198	$	—
Level 1(1):
Money market funds									62,338		—
U.S. Treasury securities	$	312,121	$	15	$	(56)	$	312,080	45,911		266,169
Total Level 1	312,121		15		(56)		312,080		108,249		266,169
Total	$	312,121	$	15	$	(56)	$	312,080	$	355,447	$	266,169

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities

The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $35.2 million and $29.1 million as of March 31, 2023 and December 31, 2022, respectively.

The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs.

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The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at March 31, 2023
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	42,547	$	—	$	—	$	42,547	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,748		1,269		11,479		—		—		—
Pension benefit obligation	(14,132)		—		—		—		(1,269)		(12,863)
Total Level 2	(1,384)		1,269		11,479		—		(1,269)		(12,863)
Total	$	41,163	$	1,269	$	11,479	$	42,547	$	(1,269)	$	(12,863)

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at December 31, 2022
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	34,354	$	—	$	—	$	34,354	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,584		1,252		11,332		—		—		—
Pension benefit obligation	(13,951)		—		—		—		(1,252)		(12,699)
Total Level 2	(1,367)		1,252		11,332		—		(1,252)		(12,699)
Total	$	32,987	$	1,252	$	11,332	$	34,354	$	(1,252)	$	(12,699)

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

(2)Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Contingent Consideration and Compensation

The former owners of the Company's acquired businesses are eligible to receive contingent consideration or additional cash compensation based on the attainment of certain operating metrics or performance criteria in the periods subsequent to acquisition. Contingent consideration and compensation are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of contingent consideration and compensation using discounted cash flow models.

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The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the three months ended March 31, 2023:

	Earnout		Contingent Compensation
Balance at December 31, 2022	$	(36,010)	$	(8,192)
Acquisition earnout (See Note 8, Acquisitions)	(31,995)		—
Earnout accretion	(191)		—
Compensation expense	—		(1,659)
Earnout payments	35,946		—
Foreign currency translation	14		(339)
Balance at March 31, 2023	$	(32,236)	$	(10,190)

Earnout accruals of zero and $36.0 million were recorded within Other current liabilities as of March 31, 2023 and December 31, 2022, respectively, and earnout accruals of $32.2 million and zero were recorded within Other non-current liabilities as of March 31, 2023 and December 31, 2022, respectively. Contingent compensation accruals of $6.1 million and $1.5 million are recorded within current Accrued salaries and benefits as of March 31, 2023 and December 31, 2022, respectively, and contingent compensation accruals of $4.1 million and $6.7 million are recorded within non-current Accrued salaries and benefits as of March 31, 2023 and December 31, 2022, respectively.

8.    Acquisitions

On February 1, 2023, the Company acquired Atreus Group GmbH ("Atreus"), a leading provider of executive interim management in Germany. The Company paid $33.4 million in the first quarter of 2023, with a subsequent estimated payment of between $9.0 million and $13.0 million to be paid in 2023 upon the completion of Atreus' statutory audit for the year ended December 31, 2022, for all of the outstanding equity of Atreus. The former owners of Atreus are eligible to receive additional cash consideration, which the Company estimated on the acquisition date to be between $30.0 million and $40.0 million, based on the achievement of certain revenue and operating income milestones for the period from the acquisition date through 2025. When estimating the present value of future cash consideration, the Company accrued an estimated $32.0 million as of the acquisition date for the earnout liability. The Company recorded an estimated $11.3 million for customer relationships, $6.9 million for software, $2.5 million for a trade name and $59.2 million of goodwill. Goodwill is primarily related to the acquired workforce and strategic fit and is not deductible for tax purposes. The consideration transferred was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition. The measurement period for purchase price allocation ends when information on the facts and circumstances becomes available, not to exceed twelve months, and the Company expects to finalize its measurements for the acquisition during the second quarter of 2023. As of March 31, 2023, the allocations remain preliminary with regard to customer relationships, software, trade name, goodwill and earnout liability.

9.    Goodwill and Other Intangible Assets

Goodwill

The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	91,527	$	91,383
Europe	1,468		1,449
Total Executive Search	92,995		92,832
On-Demand Talent	104,716		45,529
Total goodwill	$	197,711	$	138,361

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Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the three months ended March 31, 2023, are as follows:

	Executive Search				On-Demand Talent
	Americas		Europe				Total
Balance at December 31, 2022	91,383		1,449		45,529		138,361
Atreus acquisition	—		—		59,219		59,219
Foreign currency translation	144		19		(32)		131
Balance at March 31, 2023	$	91,527	$	1,468	$	104,716	$	197,711

In February 2023, the Company acquired Atreus and recorded an estimated $59.2 million of goodwill related to the acquisition in the On-Demand Talent operating segment.

Other Intangible Assets, net

The Company’s other intangible assets, net by segment, are as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	44	$	51
Europe	179		216
Asia Pacific	11		15
Total Executive Search	234		282
On-Demand Talent	25,029		6,051
Total other intangible assets, net	$	25,263	$	6,333

In February 2023, the Company acquired Atreus and recorded estimated customer relationships short-term, customer relationships long-term, software and trade name intangible assets in the On-Demand Talent operating segment of $6.0 million, $5.3 million, $6.9 million and $2.5 million, respectively. The combined estimated weighted-average amortization period for the acquired intangible assets is 6.2 years with estimated amortization periods of 5.0, 14.0, 3.0 and 3.0 years for the customer relationships short-term, customer relationships long-term, software and trade name, respectively.

The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:

	Weighted Average Life (Years)	March 31, 2023						December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Client relationships	9.7	$	22,072	$	(7,036)	$	15,036	$	10,720	$	(6,164)	$	4,556
Trade name	3.0	4,501		(1,857)		2,644		2,406		(1,925)		481
Software	3.0	10,049		(2,466)		7,583		3,110		(1,814)		1,296
Total intangible assets	7.0	$	36,622	$	(11,359)	$	25,263	$	16,236	$	(9,903)	$	6,333

Intangible asset amortization expense for the three months ended March 31, 2023 and 2022 was $1.9 million and $0.8 million, respectively.

The Company's estimated future amortization expense related to intangible assets as of March 31, 2023, for the following years ended December 31 is as follows:

2023	$	6,659
2024	7,032
2025	5,565
2026	2,080
2027	1,265
Thereafter	2,662
Total	$	25,263

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10.    Other Current and Non-current Assets and Liabilities

The components of other current assets are as follows:

	March 31, 2023		December 31, 2022
Contract assets	$	33,486	$	35,288
Other	9,344		5,434
Total other current assets	$	42,830	$	40,722

The components of other current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	—	$	36,010
Other	33,318		20,006
Total other current liabilities	$	33,318	$	56,016

The components of other non-current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	32,236	$	—
Other	4,542		5,293
Total other non-current liabilities	$	36,778	$	5,293

11.    Line of Credit

On February 24, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement, dated as of October 26, 2018 (the “Credit Agreement” and, as amended by the First Amendment to Credit Agreement, dated as of July 13,2021, and the Second Amendment, the "Amended Credit Agreement") by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Second Amendment replaced the interest rate benchmark, from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). At the Company's option, borrowings under the Amended Credit Agreement will bear interest at one-, three- or six-month Term SOFR, or an alternate base rate as set forth in the Amended Credit Agreement, in each case plus an applicable margin. Additionally, the Second Amendment provided the Company with a committed unsecured revolving credit facility in an aggregate amount of $200 million, increased from $175 million as set forth in the Credit Agreement, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature. Other than the foregoing, the material terms of the Amended Credit Agreement remain unchanged. The Amended Credit Agreement matures on July 13, 2026.

Borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Amended Credit Agreement are guaranteed by certain of the Company’s subsidiaries.

As of March 31, 2023 and December 31, 2022, the Company had no outstanding borrowings. The Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed.

12.    Stock-Based Compensation

The Company's Third Amended and Restated Heidrick & Struggles 2012 GlobalShare Program (the "Third A&R Program") provides for grants of stock options, stock appreciation rights, restricted stock units, performance stock units, and other stock-based compensation awards that are valued based upon the grant date fair value of the awards. These awards may be granted to directors, selected employees and independent contractors.

As of March 31, 2023, 3,796,496 awards have been issued under the Third A&R Program, including 768,409 forfeited awards, and 321,913 shares remain available for future awards. The Third A&R Program provides that no awards can be granted after May 28, 2028.

The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs over the requisite service period.

A summary of information with respect to stock-based compensation is as follows:

	Three Months Ended March 31,
	2023		2022
Salaries and benefits (1)	$	2,597	$	2,904
Income tax benefit related to stock-based compensation included in net income	715		790

(1) Includes $0.8 million of expense and $0.8 million of income related to cash-settled restricted stock units for the three months ended March 31, 2023 and 2022, respectively.

Restricted Stock Units

Restricted stock units are subject to ratable vesting over a three-year or four-year period dependent upon the terms of the individual grant. Compensation expense related to service-based restricted stock units is recognized on a straight-line basis over the vesting period.

Restricted stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Restricted Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	728,285	$	31.97
Granted	—	—
Vested and converted to common stock	(171,420)	33.07
Forfeited	(9,777)	29.55
Outstanding on March 31, 2023	547,088	$	31.67

As of March 31, 2023, there was $4.9 million of pre-tax unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted average of 2.1 years.

Performance Stock Units

The Company grants performance stock units to certain of its senior executives. The performance stock units are generally subject to cliff vesting at the end of a three-year period. The vesting will vary between 0% and 200% based on the attainment of certain performance and market conditions over the three-year vesting period. Half of the award is based on the achievement of operating margin thresholds and half of the award is based on the Company's total shareholder return, relative to a peer group. The fair value of the awards subject to total shareholder return metrics is determined using the Monte Carlo simulation model. A Monte Carlo simulation model uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions and the resulting fair value of the award. The performance stock units are expensed on a straight-line basis over the three-year vesting period.

Performance stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Performance Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	260,452	$	40.02
Granted	26,660	33.27
Vested and converted to common stock	(124,743)	31.51
Forfeited	—	—
Outstanding on March 31, 2023	162,369	$	45.46

As of March 31, 2023, there was $4.3 million of pre-tax unrecognized compensation expense related to unvested performance stock units, which is expected to be recognized over a weighted average of 1.6 years.

Phantom Stock Units

Phantom stock units are grants of phantom stock with respect to shares of the Company's common stock that are settled in cash and are subject to various restrictions, including restrictions on transferability, vesting and forfeiture provisions. Shares of phantom stock that do not vest for any reason will be forfeited by the recipient and will revert to the Company.

Phantom stock units are subject to vesting over a period of four years, and such vesting is subject to certain other conditions, including continued service to the Company. As a result of the cash-settlement feature of the awards, the Company classifies the awards as liability awards, which are measured at fair value at each reporting date and the vested portion of the award is recognized as a liability to the extent that the service condition is deemed probable. The fair value of the phantom stock awards on the balance sheet date is determined using the closing share price of the Company's common stock on that date.

The Company recorded phantom stock-based compensation expense of $0.8 million and income of $0.8 million during the three months ended March 31, 2023 and 2022, respectively.

Phantom stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Phantom Stock Units
Outstanding on December 31, 2022	321,155
Granted	—
Vested	—
Forfeited	(9,775)
Outstanding on March 31, 2023	311,380

As of March 31, 2023, there was $1.9 million of pre-tax unrecognized compensation expense related to unvested phantom stock units, which is expected to be recognized over a weighted average of 2.8 years.

13. Restructuring

During the year ended December 31, 2020, the Company implemented a restructuring plan (the "2020 Plan") to optimize future growth and profitability. The primary components of the 2020 Plan included a workforce reduction, a reduction of the Company's real estate expenses and professional fees, and the elimination of certain deferred compensation programs. The Company did not incur any charges during the three months ended March 31, 2023 and 2022 and does not anticipate incurring any future charges under the 2020 Plan.

Changes in the restructuring accrual for the three months ended March 31, 2023 were as follows:

	Employee Related
Accrual balance at December 31, 2022	3,422
Cash payments	(3,516)
Non-cash write-offs	—
Exchange rate fluctuations	94
Accrual balance at March 31, 2023	$	—

Restructuring accruals associated with the elimination of certain deferred compensation programs of $3.4 million were recorded within current Accrued salaries and benefits in the Consolidated Balance Sheets as of December 31, 2022.

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14.    Income Taxes

The Company reported income before taxes of $22.8 million and an income tax provision of $7.2 million for the three months ended March 31, 2023. The Company reported income before taxes of $27.9 million and an income tax provision of $9.4 million for the three months ended March 31, 2022. The effective tax rates for the three months ended March 31, 2023 and 2022, were 31.7% and 33.7%, respectively. The effective tax rates for the three months ended March 31, 2023 and 2022, were each impacted by one-time items and the mix of income.

15.    Changes in Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the three months ended March 31, 2023 are as follows:

	Available- for- Sale Securities		Foreign Currency Translation		Pension		AOCI
Balance at December 31, 2022	$	(41)	$	(4,163)	$	15	$	(4,189)
Other comprehensive income before reclassification, net of tax	41		402		—		443
Balance at March 31, 2023	$	—	$	(3,761)	$	15	$	(3,746)

16.    Segment Information

The Company has five operating segments. The Executive Search business operates in the Americas, Europe (which includes Africa) and Asia Pacific (which includes the Middle East), and the Heidrick Consulting and On-Demand Talent businesses operate globally.

For segment purposes, reimbursements of out-of-pocket expenses classified as revenue and other operating income are reported separately and, therefore, are not included in the results of each segment. The Company believes that analyzing trends in revenue before reimbursements (net revenue), analyzing operating expenses as a percentage of net revenue, and analyzing operating income, more appropriately reflect its core operations.

Revenue and operating income by segment are as follows:

	Three Months Ended March 31,
	2023		2022
Revenue
Executive Search
Americas	$	127,327	$	162,553
Europe	38,931		49,745
Asia Pacific	24,229		30,251
Total Executive Search	190,487		242,549
On-Demand Talent	31,117		23,381
Heidrick Consulting	17,713		17,931
Revenue before reimbursements (net revenue)	239,317		283,861
Reimbursements	2,802		1,676
Total revenue	$	242,119	$	285,537

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	Three Months Ended March 31,
	2023		2022
Operating income (loss)
Executive Search
Americas	$	38,699	$	39,851
Europe	1,712		5,403
Asia Pacific	3,282		5,054
Total Executive Search	43,693		50,308
On-Demand Talent	(4,364)		(582)
Heidrick Consulting	(3,116)		(2,084)
Total segment operating income	36,213		47,642
Research and Development	(5,528)		(4,402)
Global Operations Support	(12,914)		(13,008)
Total operating income	$	17,771	$	30,232

17.    Guarantees

The Company has utilized letters of credit to support certain obligations, primarily for its office lease agreements. The letters of credit were made to secure the respective agreements and are for the terms of the agreements, which extend through 2033. For each letter of credit issued, the Company would have to use cash to fulfill the obligation if there is a default on a payment. The maximum amount of undiscounted payments the Company would be required to make in the event of default on all outstanding letters of credit is approximately $4.6 million as of March 31, 2023. The Company has not accrued for these arrangements as no event of default exists or is expected to exist.

18.    Commitments and Contingencies

Litigation

The Company has contingent liabilities from various pending claims and litigation matters arising in the ordinary course of the Company’s business, some of which involve claims for damages that are substantial in amount. Some of these matters are covered in part by insurance. Based upon information currently available, the Company believes the ultimate resolution of such claims and litigation will not have a material adverse effect on its financial condition, results of operations or liquidity.

19.    Subsequent Event

On April 1, 2023, the Company acquired businessfourzero, a next generation consultancy specializing in developing and implementing purpose-driven change. Initial consideration of $9.5 million was paid in the second quarter of 2023 with an anticipated future payment in 2026, based on the achievement of certain revenue and operating income metrics for the period from the acquisition date through 2025, which the Company estimates to be between $4.0 million and $8.0 million as of the acquisition date.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as other sections of this quarterly report on Form 10-Q contain forward-looking statements within the meaning of the federal securities laws. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements are not historical facts or guarantees of future performance, but instead represent only our beliefs, assumptions, expectations, estimates, forecasts and projections regarding future events, many of which, by their nature, are inherently uncertain and outside our control. . Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “outlook,” “projects,” “forecasts,” and similar expressions. These statements include statements other than historical information or statements of current condition and may relate to our future plans and objectives and results. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.

Factors that may cause actual outcomes and results to differ materially from what is expressed, forecasted or implied in the forward-looking statements include, among other things, our ability to attract, integrate, develop, manage and retain qualified consultants and senior leaders; our ability to prevent our consultants from taking our clients with them to another firm; our ability to maintain our professional reputation and brand name; our clients’ ability to restrict us from recruiting their employees; our heavy reliance on information management systems; risks arising from our implementation of new technology and intellectual property to deliver new products and services to our clients; our dependence on third parties for the execution of certain critical functions; the fact that we face the risk of liability in the services we perform; the fact that data security, data privacy and data protection laws and other evolving regulations and cross-border data transfer restrictions may limit the use of our services and adversely affect our business; any challenges to the classification of our on-demand talent as independent contractors; the increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted cyber-related attacks that could pose a risk to our systems, networks, solutions, services and data; the impacts, direct and indirect, of the COVID-19 pandemic (including the emergence of variant strains) or other highly infectious or contagious disease on our business, our consultants and employees, and the overall economy; the aggressive competition we face; the fact that our net revenue may be affected by adverse economic conditions including inflation, the impact of foreign currency exchange rate fluctuations; our ability to access additional credit; social, political, regulatory, legal and economic risks in markets where we operate, including the impact of the ongoing war in Ukraine and the risks of an expansion or escalation of that conflict; unfavorable tax law changes and tax authority rulings; the timing of the establishment or reversal of valuation allowance on deferred tax assets; the fact that we may not be able to align our cost structure with net revenue; any impairment of our goodwill, other intangible assets and other long-lived assets; our ability to execute and integrate future acquisitions; and the fact that we have anti-takeover provisions that could make an acquisition of us difficult and expensive. We caution the reader that the list of factors may not be exhaustive. For more information on the factors that could affect the outcome of forward-looking statements, refer to our Annual Report on Form 10-K for the year ended December 31, 2022, under the heading "Risk Factors" in Item 1A, and any subsequent Company filings with the Securities and Exchange Commission ("SEC"). We caution the reader that the list of factors may not be exhaustive. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Executive Overview

Our Business. Heidrick & Struggles International, Inc. (the "Company," "we," "us," or "our") is a human capital leadership advisory firm providing executive search, consulting and on-demand talent services to businesses and business leaders worldwide to help them to improve the effectiveness of their leadership teams. We provide our services to a broad range of clients through the expertise of over 500 consultants located in major cities around the world. The Company and its predecessors have been leadership advisors for more than 65 years.

Our service offerings include the following:

Executive Search. We partner with our clients - respected organizations across the globe - to help them build and sustain the best leadership teams in the world, with a specialized focus on the placement of top-level senior executives. Through our unique relationship-based, data-driven approach, we help our clients find the right leaders, set them up for success, and accelerate their and their team’s performance.

We believe focusing on top-level senior executives provides the opportunity for several competitive advantages including access to and influence with key decision makers, increased potential for recurring search and consulting engagements, higher fees per search, enhanced brand visibility, and a leveraged global footprint. Working at the top of client organizations also facilitates the attraction and retention of high-caliber consultants who desire to serve top industry executives and their

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leadership needs. Our executive search services derive revenue through the fees generated for each search engagement, which generally are based on the annual compensation for the placed executive. We provide our executive search services primarily on a retained basis.

We employ a global approach to executive search built on better insights, more data and faster decision making facilitated by the use of our Heidrick Leadership Framework and Heidrick Connect. Our Heidrick Leadership Framework allows clients to holistically evaluate a candidate's pivotal experience and expertise, leadership capabilities, agility and potential, and culture fit and impact, thereby allowing our clients to find the right person for the role. We supplement our Heidrick Leadership Framework through a series of additional online tools including our Leadership Accelerator, Leadership Signature and Culture Signature assessments. Heidrick Connect, a completely digital, always available client experience portal, allows our clients to access talent insights for each engagement, including the Heidrick Leadership Framework and other internally developed assessment tools. In response to working remotely, our Executive Search teams employed Heidrick Connect to operate effectively and efficiently while engaging virtually with our clients. Additionally, we have introduced upgrades to Heidrick Connect, resulting in greater flexibility, increased productivity and the ability to deliver more insights to our clients.

The executive search industry consists of several thousand executive search firms worldwide. Executive search firms are generally separated into two broad categories: retained search and contingency search. Retained executive search firms fulfill their clients’ senior leadership needs by identifying potentially qualified candidates and assisting clients in evaluating and assessing these candidates. Retained executive search firms generally are compensated for their services regardless of whether the client employs a candidate identified by the search firm and are generally retained on an exclusive basis. Typically, retained executive search firms are paid a retainer for their services equal to approximately one-third of the estimated first year compensation for the position to be filled. In addition, if the actual compensation of a placed candidate exceeds the estimated compensation, executive search firms often are authorized to bill the client for one-third of the excess. In contrast, contingency search firms are compensated only upon successfully placing a recommended candidate.

We are a retained executive search firm. Our search process typically consists of the following steps:

•Analyzing the client’s business needs in order to understand its organizational structure, relationships and culture, advising the client as to the required set of skills and experiences for the position, and identifying with the client the other characteristics desired of the successful candidate;

•Selecting, contacting, interviewing and evaluating candidates on the basis of experience and potential cultural fit with the client organization;

•Presenting confidential written reports on the candidates who potentially fit the position specification;

•Scheduling a mutually convenient meeting between the client and each candidate;

•Completing reference checks on the final candidate selected by the client; and

•Assisting the client in structuring compensation packages and supporting the successful candidate’s integration into the client team.

On-Demand Talent. Our on-demand talent services provide clients seamless, on-demand access to top independent talent, including professionals with deep industry and functional expertise for interim leadership roles and critical, project-based initiatives. Our unique model delivers the right independent talent on demand by blending proprietary data and technology with a dedicated Talent Solutions team.

Heidrick Consulting. As a complement and extension of our search services, we partner with organizations through Heidrick Consulting to provide advisory services related to leadership assessment and development, organization and team effectiveness, and culture shaping. Our tools and experts use data and technology to bring science to the art of human capital development and organizational design. Our services allow our clients to accelerate their strategies and the effectiveness of individual leaders, teams and organizations as a whole.

Heidrick Consulting offers our clients impactful approaches to human capital development through a myriad of solutions, ranging from leadership assessment and development, team and organization acceleration, digital acceleration and innovation, diversity and inclusion advisory services, and culture shaping. Applying our deep understanding of the behaviors and attributes of leaders across many of the world’s premier companies, we guide our clients as they build a thriving culture of future-ready

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leadership. These premium services and offerings, which complement our Executive Search expertise, significantly contribute to our ability to deliver a full-service human capital consulting solution to our clients.

We continue to focus on increasing the scale and impact of our Heidrick Consulting business and expect to improve the operating margins of this important business as we do so. Our consulting services generate revenue primarily through the professional fees generated for each engagement which are generally based on the size of the project and scope of services. Our Heidrick Consulting teams have pivoted to create new digital solutions for Leadership Assessments, Team Acceleration, and Organization and Culture Acceleration that can be delivered virtually in response to the hybrid work arrangements utilized by our clients around the world.

Key Performance Indicators

We manage and assess our performance through various means, with primary financial and operational measures including net revenue, operating income, operating margin, Adjusted EBITDA (non-GAAP) and Adjusted EBITDA margin (non-GAAP). Executive Search and Heidrick Consulting performance is also measured using consultant headcount. Specific to Executive Search, confirmation trends, consultant productivity and average revenue per search are used to measure performance. Productivity is measured by annualized Executive Search net revenue per consultant.

Revenue is driven by market conditions and a combination of the number of executive search engagements and consulting projects and the average revenue per search or project. With the exception of compensation expense and cost of services, incremental increases in revenue do not necessarily result in proportionate increases in costs, particularly operating and administrative expenses, thus creating the potential to improve operating margins.

The number of consultants, confirmation trends, number of searches or projects completed, productivity levels and the average revenue per search or project will vary from quarter to quarter, affecting net revenue and operating margin.

Our Compensation Model

At the consultant level, there are fixed and variable components of compensation. Individuals are rewarded for their performance based on a system that directly ties a portion of their compensation to the amount of net revenue for which they are responsible. A portion of the reward may be based upon individual performance against a series of non-financial measures. Credit towards the variable portion of a consultant’s compensation is earned by generating net revenue for winning and executing work. Each quarter, we review and update the expected annual performance of all consultants and accrue variable compensation accordingly. The amount of variable compensation that is accrued for each consultant is based on a tiered payout model. Overall Company performance determines the amount available for total variable compensation. The more net revenue that is generated by the consultant, the higher the percentage credited towards the consultant’s variable compensation and thus accrued by our Company as expense.

The mix of individual consultants who generate revenue can significantly affect the total amount of compensation expense recorded, which directly impacts operating margin. As a result, the variable portion of the compensation expense may fluctuate significantly from quarter to quarter. The total variable compensation is discretionary and is based on Company-wide financial targets approved by the Human Resources and Compensation Committee of the Board of Directors.

Historically, a portion of the Company’s consultants’ and management cash bonuses were deferred and paid over a three-year vesting period. The portion of the bonus was approximately 15% depending on the employee’s level or position. The compensation expense related to the amounts being deferred was recognized on a graded vesting attribution method over the requisite service period. This service period began on January 1 of the respective fiscal year and continued through the deferral date, which coincided with the Company’s bonus payments in the first half of the following year and for an additional three-year vesting period. The deferrals are recorded in Accrued salaries and benefits within both Current liabilities and Non-current liabilities in the Consolidated Balance Sheets.

In 2020, the Company terminated the cash bonus deferral for consultants and, in 2021, terminated the cash bonus deferral for management. The Company now pays 100% of the cash bonuses earned by consultants and management in the first half of the following year. Consultant and management cash bonuses earned prior to 2020 and 2021, respectively, will continue to be paid under the terms of the cash bonus deferral program. The deferrals are recorded in Accrued salaries and benefits within both Current liabilities and Non-current liabilities in the Consolidated Balance Sheets.

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Second Quarter 2023 Outlook

The Company expects 2023 second quarter consolidated net revenue of between $260 million and $280 million, while acknowledging that continued fluidity in external factors such as foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions may impact quarterly results. In addition, this outlook is based on the average currency rates in March 2023 and reflects, among other factors, management's assumptions for the anticipated volume of new Executive Search confirmations, On-Demand Talent projects, and Heidrick Consulting assignments, consultant productivity, consultant retention, and the seasonality of the business, along with the current backlog.

The Company's 2023 second quarter guidance is subject to a number of risks and uncertainties, including those discussed under Item 1A - Risk Factors in our 2022 Annual Report on Form 10-K, as updated in our subsequent quarterly reports on Form 10-Q and in our other filings with the SEC. As such, actual results could vary from these projections.

Results of Operations

The following table summarizes, for the periods indicated, our results of operations as a percentage of revenue before reimbursements (net revenue): 

	Three Months Ended March 31,
	2023		2022
Revenue
Revenue before reimbursements (net revenue)	100.0	%	100.0	%
Reimbursements	1.2		0.6
Total revenue	101.2		100.6
Operating expenses
Salaries and benefits	66.4		71.0
General and administrative expenses	14.3		10.5
Cost of services	9.5		6.3
Research and development	2.3		1.6
Restructuring charges	—		—
Reimbursed expenses	1.2		0.6
Total operating expenses	93.7		89.9
Operating income	7.4		10.7
Non-operating income (expense)
Interest, net	1.4		—
Other, net	0.8		(0.9)
Net non-operating income (expense)	2.1		(0.8)
Income before income taxes	9.5		9.8
Provision for income taxes	3.0		3.3
Net income	6.5	%	6.5	%

Note: Totals and sub-totals may not equal the sum of individual line items due to rounding.

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The following tables set forth, for the periods indicated, our revenue and operating income by segment (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenue
Executive Search
Americas	$	127,327	$	162,553
Europe	38,931		49,745
Asia Pacific	24,229		30,251
Total Executive Search	190,487		242,549
On-Demand Talent	31,117		23,381
Heidrick Consulting	17,713		17,931
Revenue before reimbursements (net revenue)	239,317		283,861
Reimbursements	2,802		1,676
Total revenue	$	242,119	$	285,537

	Three Months Ended March 31,
	2023		2022
Operating income (loss)
Executive Search
Americas	$	38,699	$	39,851
Europe	1,712		5,403
Asia Pacific	3,282		5,054
Total Executive Search	43,693		50,308
On-Demand Talent	(4,364)		(582)
Heidrick Consulting	(3,116)		(2,084)
Total segment operating income	36,213		47,642
Research and Development	(5,528)		(4,402)
Global Operations Support	(12,914)		(13,008)
Total operating income	$	17,771	$	30,232

Three Months Ended March 31, 2023 Compared to the Three Months March 31, 2022

Total revenue. Consolidated total revenue decreased $43.4 million, or 15.2%, to $242.1 million for the three months ended March 31, 2023, from $285.5 million for the three months ended March 31, 2022. The decrease in total revenue was primarily due to the decrease in revenue before reimbursements (net revenue).

Revenue before reimbursements (net revenue). Consolidated net revenue decreased $44.5 million, or 15.7%, to $239.3 million for the three months ended March 31, 2023, from $283.9 million for the three months ended March 31, 2022. Foreign exchange rate fluctuations negatively impacted results by $5.5 million, or 1.9%. Executive Search net revenue was $190.5 million for the three months ended March 31, 2023, a decrease of $52.1 million, or 21.5%, compared to the three months ended March 31, 2022. The decrease in Executive Search net revenue was primarily due to a decrease in the volume of executive search confirmations. On-Demand Talent net revenue was $31.1 million for the three months ended March 31, 2023, an increase of $7.7 million, or 33.1%, compared to the three months ended March 31, 2022. The increase in On-Demand Talent revenue was primarily due to the acquisition of Atreus Group GmbH ("Atreus") in February 2023, partially offset by a decrease in the volume of legacy on-demand projects. Heidrick Consulting net revenue was $17.7 million for the three months ended March 31, 2023, a decrease of $0.2 million, or 1.2%, compared to the three months ended March 31, 2022. The decrease in Heidrick Consulting revenue was primarily due to a decrease in leadership assessment and development consulting engagements compared to the prior year.

The number of Executive Search and Heidrick Consulting consultants was 432 and 78, respectively, as of March 31, 2023, compared to 394 and 70, respectively, as of March 31, 2022. Executive Search productivity, as measured by annualized net Executive Search revenue per consultant, was $1.8 million and $2.5 million for the three months ended March 31, 2023 and 2022, respectively. The average revenue per executive search was consistent with the prior year at approximately $124,000.

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Salaries and benefits. Consolidated salaries and benefits expense decreased $42.6 million, or 21.1%, to $158.9 million for the three months ended March 31, 2023, from $201.4 million for the three months ended March 31, 2022. Fixed compensation increased $13.1 million due to base salaries and payroll taxes, the deferred compensation plan, and retirement and benefits, as well as the acquisition of Atreus, partially offset by decreases in talent acquisition and retention costs, and stock compensation. Variable compensation decreased $55.7 million due to lower bonus accruals related to decreased consultant productivity. Foreign exchange rate fluctuations positively impacted results by $3.7 million, or 1.8%.

For the three months ended March 31, 2023, we had an average of 2,154 employees compared to an average of 1,900 employees for the three months ended March 31, 2022.

As a percentage of net revenue, salaries and benefits expense was 66.4% for the three months ended March 31, 2023, compared to 71.0% for the three months ended March 31, 2022.

General and administrative expenses. Consolidated general and administrative expenses increased $4.5 million, or 15.2%, to $34.3 million for the three months ended March 31, 2023, from $29.8 million for the three months ended March 31, 2022. The increase in general and administrative expenses was due to business development travel, intangible amortization, earnout accretion, office occupancy, information technology, professional services, and the acquisition of Atreus, partially offset by a decrease in hiring fees. Foreign exchange rate fluctuations positively impacted results by $0.6 million, or 2.2%.

As a percentage of net revenue, general and administrative expenses were 14.3% for the three months ended March 31, 2023, compared to 10.5% for the three months ended March 31, 2022.

Cost of services. Consolidated cost of services increased $4.8 million, or 26.9%, to $22.8 million for the three months ended March 31, 2023, from $18.0 million for the three months ended March 31, 2022. The increase was primarily due to the acquisition of Atreus, and the mix of Heidrick Consulting projects that required external third-party consultants. Foreign exchange rate fluctuations positively impacted results by $0.4 million, or 2.4%.

As a percentage of net revenue, cost of services was 9.5% for the three months ended March 31, 2023, compared to 6.3% for the three months ended March 31, 2022.

Research and development. Due to the rapid pace of technological advances and digital disruption many of our clients are experiencing, we believe our ability to compete successfully depends increasingly upon our ability to provide clients with timely and relevant technology-enabled products and services. As such, we are focused on developing new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. The results of our R&D efforts will be utilized to develop and enhance new and existing services and products across our current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that we may embark upon in the future from time to time, such as our new digital product Heidrick Navigator which we are beta testing. Consolidated R&D expense increased $1.1 million, or 25.6%, to $5.5 million for the three months ended March 31, 2023, from $4.4 million for the three months ended March 31, 2022. R&D expense consists of payroll, employee benefits, stock-based compensation other employee expenses and third-party professional fees associated with new product development.

Operating income. Consolidated operating income was $17.8 million for the three months ended March 31, 2023, compared to $30.2 million for the three months ended March 31, 2022. Foreign exchange rate fluctuations negatively impacted operating income by $0.7 million, or 2.4%.

Net non-operating income (expense). Net non-operating income was $5.1 million for the three months ended March 31, 2023, compared to a loss of $2.4 million for the three months ended March 31, 2022.

Interest, net, was $3.2 million of income for the three months ended March 31, 2023, compared to $0.1 million for the three months ended March 31, 2022, primarily due to higher interest rates on a higher volume of short-term investments.

Other, net, was $1.8 million of income for the three months ended March 31, 2023, compared to $2.5 million of loss for the three months ended March 31, 2022. The income in the current year is primarily due to unrealized gains on the deferred compensation plan compared to unrealized losses in the prior period. The Company's investments, including those held in the Company’s deferred compensation plan, are recorded at fair value.

Income taxes. See Note 14, Income Taxes.

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Executive Search

Americas

The Americas segment reported net revenue of $127.3 million for the three months ended March 31, 2023, a decrease of 21.7% from $162.6 million for the three months ended March 31, 2022. The decrease in net revenue was primarily due to a 30.0% decrease in the number of executive search engagements. The decrease in net revenue spanned all practice groups except the Social Impact practice group, which exhibited growth over the prior year. Foreign exchange rate fluctuations negatively impacted results by $0.3 million, or 0.2%. There were 224 Executive Search consultants in the Americas segment at March 31, 2023, compared to 205 at March 31, 2022.

Salaries and benefits expense decreased $35.2 million, or 31.3%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Fixed compensation increased $4.4 million due to the deferred compensation plan, retirement and benefits, and stock compensation, partially offset by a decrease in talent acquisition and retention costs. Variable compensation decreased $39.6 million due to lower bonus accruals related to decreased consultant productivity.

General and administrative expenses increased $1.1 million, or 11.0%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to bad debt, business development travel, and office occupancy, partially offset by decreases in professional fees and marketing.

The Americas reported operating income of $38.7 million for the three months ended March 31, 2023, a decrease of $1.2 million compared to $39.9 million for the three months ended March 31, 2022.

Europe

Europe reported net revenue of $38.9 million for the three months ended March 31, 2023, a decrease of 21.7% from $49.7 million for the three months ended March 31, 2022. The decrease in net revenue was primarily due to a 13.2% decrease in the number of executive search confirmations. The decrease in net revenue spanned all practice groups except the Social Impact and Consumer practice groups, which exhibited growth over the prior year. Foreign exchange rate fluctuations negatively impacted results by $2.7 million, or 5.4%. There were 130 Executive Search consultants in the Europe segment at March 31, 2023, compared to 116 at March 31, 2022.

Salaries and benefits expense decreased $7.7 million, or 20.1%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Fixed compensation increased $3.3 million due to base salaries and payroll taxes, retirement and benefits, and talent acquisition and retention costs, partially offset by a decrease in separation costs. Variable compensation decreased $11.0 million due to lower bonus accruals related to decreased consultant productivity.

General and administrative expense increased $0.6 million, or 10.2%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to business development travel, office occupancy, professional fees, and taxes and licenses, partially offset by a decrease in bad debt.

Europe reported operating income of $1.7 million for the three months ended March 31, 2023, a decrease of $3.7 million compared to $5.4 million for the three months ended March 31, 2022.

Asia Pacific

Asia Pacific reported net revenue of $24.2 million for the three months ended March 31, 2023, a decrease of 19.9% compared to $30.3 million for the three months ended March 31, 2022. The decrease in net revenue was primarily due to a 10.7% decrease in the number of executive search confirmations. The Industrial, Social Impact, and Financial Services practice groups exhibited growth over the prior year. Foreign exchange rate fluctuations negatively impacted results by $1.3 million, or 4.3%. There were 78 Executive Search consultants in the Asia Pacific segment at March 31, 2023, compared to 73 at March 31, 2022.

Salaries and benefits expense decreased $4.4 million, or 20.4%, for the three months ended March 31, 2023, compared to the three months March 31, 2022. Fixed compensation increased $0.8 million due to base salaries and payroll taxes, and talent acquisition and retention costs, partially offset by a decrease in retirement and benefits. Variable compensation decreased $5.2 million due to lower bonus accruals related to decreased consultant productivity.

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General and administrative expenses increased $0.1 million, or 2.9%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to business development travel and taxes and licenses, partially offset by decreases in bad debt and professional fees.

Asia Pacific reported operating income of $3.3 million for the three months ended March 31, 2023, a decrease of $1.8 million compared to $5.1 million for the three months ended March 31, 2022.

On-Demand Talent

On-Demand Talent reported net revenue of $31.1 million for the three months ended March 31, 2023, an increase of 33.1% compared to $23.4 million for the three months ended March 31, 2022. The increase in On-Demand Talent revenue was primarily due the acquisition of Atreus, partially offset by a decrease in the volume of legacy on-demand projects. Foreign exchange rate fluctuations negatively impacted results by $0.6 million, or 2.5%.

Salaries and benefits expense increased $4.9 million, or 93.6%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Fixed compensation increased $3.5 million due to base salaries and payroll taxes, including the acquisition of Atreus, and retirement and benefits. Variable compensation increased $1.4 million due to higher bonus accruals related to increased performance.

General and administrative expense increased $1.9 million, or 83.5%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to intangible amortization, including the acquisition of Atreus, professional fees, marketing, office occupancy, and information technology, partially offset by decreases in business development travel and bad debt.

Cost of services increased $4.7 million, or 28.6%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily due to the acquisition of Atreus.

On-Demand Talent reported an operating loss of $4.4 million for the three months ended March 31, 2023, a decrease of $3.8 million compared to an operating loss of $0.6 million for the three months ended March 31, 2022.

Heidrick Consulting

Heidrick Consulting reported net revenue of $17.7 million for the three months ended March 31, 2023, a decrease of 1.2% compared to $17.9 million for the three months ended March 31, 2022. The decrease in net revenue was primarily due to a 1.3% decrease in the number of consulting engagements. Foreign exchange rate fluctuations negatively impacted results by $0.7 million, or 3.8%. There were 78 Heidrick Consulting consultants at March 31, 2023 compared to 70 at March 31, 2022.

Salaries and benefits expense increased $0.3 million, or 2.0%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Fixed compensation increased $1.4 million due to base salaries and payroll taxes, retirement and benefits, and the deferred compensation plan. Variable compensation decreased $1.1 million due to lower bonus accruals related to decreased consultant productivity.

General and administrative expenses increased $0.4 million, or 11.0%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to office occupancy and business development travel, partially offset by a decrease in professional fees.

Cost of services increased $0.2 million, or 9.6%, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, due to the mix of services provided, including a higher proportion of culture work.

Heidrick Consulting reported an operating loss of $3.1 million for the three months ended March 31, 2023, a decrease of $1.0 million compared to an operating loss of $2.1 million for the three months ended March 31, 2022.

Global Operations Support

Global Operations Support expenses for the three months ended March 31, 2023, decreased $0.1 million, or 0.7%, to $12.9 million from $13.0 million for the three months ended March 31, 2022.

Salaries and benefits expense decreased $0.5 million, or 5.8%, for the three months ended March 31, 2023, due to stock compensation, partially offset by increases in base salaries and payroll taxes, retirement and benefits, and separation costs.

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General and administrative expenses increased $0.4 million, or 10.0%, for the three months ended March 31, 2023, due professional fees, information technology, and insurance and bank fees, partially offset by a decrease in hiring fees.

Liquidity and Capital Resources

General. We continually evaluate our liquidity requirements, capital needs and availability of capital resources based on our operating needs. We believe that our available cash balances, funds expected to be generated from operations and funds available under our committed revolving credit facility will be sufficient to finance our operations for at least the next 12 months and the foreseeable future, as well as to finance the cash payments associated with our cash dividends and stock repurchase program.

We pay the non-deferred portion of annual bonuses in the first half of the year following the year in which they are earned. Employee bonuses are accrued throughout the year and are based on our performance and the performance of the individual employee.

Lines of credit. On February 24, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement, dated as of October 26, 2018 (the “Credit Agreement” and, as amended by the First Amendment to Credit Agreement, dated as of July 13,2021, and the Second Amendment, the "Amended Credit Agreement") by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Second Amendment replaced the interest rate benchmark, from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). At the Company's option, borrowings under the Amended Credit Agreement will bear interest at one-, three- or six-month Term SOFR, or an alternate base rate as set forth in the Amended Credit Agreement, in each case plus an applicable margin. Additionally, the Second Amendment provided the Company with a committed unsecured revolving credit facility in an aggregate amount of $200 million, increased from $175 million as set forth in the Credit Agreement, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature. Other than the foregoing, the material terms of the Amended Credit Agreement remain unchanged. The Amended Credit Agreement matures on July 13, 2026.

Borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Amended Credit Agreement are guaranteed by certain of the Company’s subsidiaries.

As of March 31, 2023 and December 31, 2022, the Company had no outstanding borrowings. The Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed.

Cash, cash equivalents and marketable securities. Cash, cash equivalents and marketable securities at March 31, 2023, December 31, 2022, and March 31, 2022 were $204.7 million, $621.6 million and $268.0 million, respectively. The $204.7 million of cash, cash equivalents and marketable securities at March 31, 2023 includes $142.2 million held by our foreign subsidiaries. A portion of the $142.2 million is considered permanently reinvested in these foreign subsidiaries. If these funds were required to satisfy obligations in the U.S., the repatriation of these funds could cause us to incur additional U.S. income taxes or foreign withholding taxes.

Cash flows used in operating activities. Cash used in operating activities was $337.0 million for the three months ended March 31, 2023, primarily reflecting a decrease in accrued expenses of $326.0 million and an increase in accounts receivable of $24.3 million, partially offset by net income net of non-cash charges of $26.7 million. The decrease in accrued expenses is primarily due to cash bonus payments related to 2022 and prior year cash bonus deferrals of $422.0 million, partially offset by 2023 bonus accruals.

Cash used in operating activities was $262.2 million for the three months ended March 31, 2022, primarily reflecting a decrease in accrued expenses of $227.4 million and an increase in accounts receivable of $53.1 million, partially offset by net income net of non-cash charges of $24.7 million. The decrease in accrued expenses is primarily due to cash bonus payments related to 2021 and prior year cash bonus deferrals of $383.1 million, partially offset by 2022 bonus accruals.

Cash flows provided by (used in) investing activities. Cash provided by investing activities was $228.1 million for the three months ended March 31, 2023, due to proceeds from sales of marketable securities and investments of $268.0 million, partially offset by the acquisition of Atreus of $29.9 million, purchases of marketable securities and investments of $6.2 million, and capital expenditures of $3.8 million.

27

Cash used in investing activities was $6.1 million for the three months ended March 31, 2022, due to capital expenditures of $1.8 million related to office build-outs, and the purchase of marketable securities and investments of $5.0 million, partially offset by the proceeds from sales of marketable securities and investments of $1.0 million.

Cash flows used in financing activities. Cash used in financing activities was $43.2 million for the three months ended March 31, 2023, due to the Business Talent Group earnout payment of $35.9 million, employee tax withholding payments on equity transactions of $4.1 million, and dividend payments of $3.1 million.

Cash used in financing activities was $6.3 million for the three months ended March 31, 2022, due to employee tax withholding payments on equity transactions of $3.2 million and dividend payments of $3.1 million.

Off-Balance Sheet Arrangements. We do not have material off-balance sheet arrangements, special purpose entities, trading activities of non-exchange traded contracts or transactions with related parties.

Contractual obligations. Our lease portfolio is comprised of operating leases for office space and equipment. As of March 31, 2023, we had aggregate future lease payment obligations of $81.4 million, with $20.6 million payable within 12 months. Associated with our lease portfolio, we have asset retirement obligations for the retirement of tangible long-lived assets related to our obligation at the end of the lease term to return office space to the landlord in its original condition. As of March 31, 2023, we had asset retirement obligations of $2.9 million, with $0.1 million payable within 12 months.

In addition to lease-related contractual obligations, we also have liabilities related to certain employee benefit plans. These liabilities are recorded in our Consolidated Balance Sheet at March 31, 2023. The obligations related to these employee benefit plans are described in Note 12, Employee Benefit Plans, and Note 13, Pension Plan and Life Insurance Contract, in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023. As of March 31, 2023, we did not have a liability for uncertain tax positions.

Application of Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared using accounting principles generally accepted in the United States of America. Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on February 27, 2023, and in Note 2, Summary of Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements included in Item 1. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. If actual amounts are ultimately different from previous estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or if changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes its critical accounting policies that reflect its more significant estimates and assumptions relate to revenue recognition, income taxes, interim effective tax rate and assessment of goodwill and other intangible assets for impairment. See Application of Critical Accounting Policies and Estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023.

Recently Issued and Adopted Financial Accounting Standards

The information presented in Note 2, Summary of Significant Accounting Policies, to our Condensed Consolidated Financial Statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

28

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currency market risk. With our operations in the Americas, Europe and Asia Pacific, we conduct business using various currencies. Revenue earned in each country is generally matched with the associated expenses incurred, thereby reducing currency risk to earnings. However, because certain assets and liabilities are denominated in currencies other than the U.S. dollar, changes in currency rates may cause fluctuations in the valuation of such assets and liabilities. As the local currency of our subsidiaries has generally been designated as the functional currency, we are affected by the translation of foreign currency financial statements into U.S. dollars. A 10% change in the average exchange rate for currencies of all foreign countries in which we operate would have increased or decreased our net income by approximately $0.2 million for the three months ended March 31, 2023. For financial information by segment, see Note 16, Segment Information, in the Notes to Condensed Consolidated Financial Statements.

ITEM 4. CONTROLS AND PROCEDURES

(a)Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 13a-15(e) and 15d-15(e), that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Management of the Company, with the participation of the principal executive officer and the principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2023. Based on the evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2023.

(b) Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the three months ended March 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in Note 18, Commitments and Contingencies, to our Condensed Consolidated Financial Statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the Company's 2022 Annual Report on Form 10-K for the year ended December 31, 2022, under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. There have been no material changes to the Company’s risk factors from those set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023.

29

Item 6. Exhibits

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Exhibit	Filing Date/Period End Date
*31.1	Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of the Company’s Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
†32.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
†32.2	Certification of the Company’s Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document
*101.SCH	Inline XBRL Taxonomy Extension Schema Document
*101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document
*101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
*104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
†	Furnished herewith.

30

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: April 24, 2023

Heidrick & Struggles International, Inc.

(Registrant)

/s/ Stephen A. Bondi

Stephen A. Bondi

Vice President, Controller
(Duly authorized on behalf of the registrant and in his capacity as Chief Accounting Officer)

31

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Krishnan Rajagopalan, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Heidrick & Struggles International, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	April 24, 2023	/s/ Krishnan Rajagopalan
		Krishnan Rajagopalan
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mark R. Harris, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Heidrick & Struggles International, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	April 24, 2023	/s/ Mark R. Harris
		Mark R. Harris
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Heidrick & Struggles International, Inc., a Delaware corporation (the “Company”), does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	April 24, 2023	/s/ Krishnan Rajagopalan
		Krishnan Rajagopalan
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Heidrick & Struggles International, Inc., a Delaware corporation (the “Company”), does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	April 24, 2023	/s/ Mark R. Harris
		Mark R. Harris
		Executive Vice President and Chief Financial Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 21, 2023
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2023
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-25837
Entity Registrant Name	HEIDRICK & STRUGGLES INTERNATIONAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2681268
Entity Address, Address Line One	233 South Wacker Drive
Entity Address, Address Line Two	Suite 4900
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60606-6303
City Area Code	(312)
Local Phone Number	496-1200
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	HSII
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,027,637
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001066605
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 204,691	$ 355,447
Marketable securities	0	266,169
Accounts receivable, net of allowances of $7,248 and $6,643, respectively	160,092	126,437
Prepaid expenses	31,529	24,098
Other current assets	42,830	40,722
Income taxes recoverable	7,190	10,946
Total current assets	446,332	823,819
Non-current assets
Property and equipment, net	32,517	30,207
Operating lease right-of-use assets	69,589	71,457
Assets designated for retirement and pension plans	11,479	11,332
Investments	42,547	34,354
Other non-current assets	31,666	25,788
Goodwill	197,711	138,361
Other intangible assets, net	25,263	6,333
Deferred income taxes	34,361	33,987
Total non-current assets	445,133	351,819
Total assets	891,465	1,175,638
Current liabilities
Accounts payable	16,975	14,613
Accrued salaries and benefits	140,056	451,161
Deferred revenue	43,345	43,057
Operating lease liabilities	20,584	19,554
Other current liabilities	33,318	56,016
Income taxes payable	5,896	4,076
Total current liabilities	260,174	588,477
Non-current liabilities
Accrued salaries and benefits	48,138	59,467
Retirement and pension plans	56,882	48,456
Operating lease liabilities	60,851	63,299
Other non-current liabilities	36,778	5,293
Deferred income taxes	7,530	0
Total non-current liabilities	210,179	176,515
Total liabilities	470,353	764,992
Commitments and contingencies (Note 18)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at March 31, 2023 and December 31, 2022	0	0
Common stock, $0.01 par value, 100,000,000 shares authorized, 20,037,959 and 19,866,287 shares issued, 20,027,637 and 19,861,207 shares outstanding at March 31, 2023 and December 31, 2022, respectively	200	199
Treasury stock at cost, 10,322 and 5,080 shares at March 31, 2023 and December 31, 2022, respectively	(354)	(191)
Additional paid in capital	244,341	246,630
Retained earnings	180,671	168,197
Accumulated other comprehensive loss	(3,746)	(4,189)
Total stockholders’ equity	421,112	410,646
Total liabilities and stockholders’ equity	$ 891,465	$ 1,175,638

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit loss, current	$ 7,248	$ 6,643
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01
Common stock, authorized (in shares)	100,000,000
Common stock, issued (in shares)	20,037,959	19,866,287
Common stock, outstanding (in shares)	20,027,637	19,861,207
Treasury stock (in shares)	10,322	5,080

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue before reimbursements (net revenue)	$ 239,317	$ 283,861
Reimbursements	2,802	1,676
Total revenue	242,119	285,537
Salaries and benefits	158,859	201,445
General and administrative expenses	34,327	29,794
Cost of services	22,832	17,988
Research and development	5,528	4,402
Reimbursed expenses	2,802	1,676
Total operating expenses	224,348	255,305
Operating income	17,771	30,232
Interest, net	3,249	110
Other, net	1,809	(2,471)
Net non-operating income (expense)	5,058	(2,361)
Income before income taxes	22,829	27,871
Provision for income taxes	7,243	9,404
Net income	15,586	18,467
Foreign currency translation adjustment	402	(1,082)
Net unrealized gain on available-for-sale investments	41	0
Other comprehensive income (loss), net of tax	443	(1,082)
Comprehensive income	$ 16,029	$ 17,385
Weighted-average common shares outstanding
Basic (in shares)	19,904,000	19,624,000
Diluted (in shares)	20,569,000	20,511,000
Earnings per common share
Basic (in dollars per share)	$ 0.78	$ 0.94
Diluted (in dollars per share)	0.76	0.90
Cash dividends paid per share (in dollars per share)	$ 0.15	$ 0.15

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2021		19,597,000
Beginning balance at Dec. 31, 2021	$ 336,020	$ 196	$ (191)	$ 233,163	$ 101,177	$ 1,675
Treasury stock, beginning balance (in shares) at Dec. 31, 2021			5,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	18,467				18,467
Other comprehensive income (loss), net of tax	(1,082)					(1,082)
Stock-based compensation	3,698			3,698
Vesting of equity awards, net of tax withholding (in shares)		126,000
Vesting of equity awards, net of tax withholding	(3,219)	$ 1		(3,220)
Cash dividends declared ($0.15 per share)	(2,940)				(2,940)
Dividend equivalents on restricted stock units	(179)				(179)
Ending balance (in shares) at Mar. 31, 2022		19,723,000
Ending balance at Mar. 31, 2022	$ 350,765	$ 197	$ (191)	233,641	116,525	593
Treasury stock, ending balance (in shares) at Mar. 31, 2022			5,000
Beginning balance (in shares) at Dec. 31, 2022	19,861,207	19,866,000
Beginning balance at Dec. 31, 2022	$ 410,646	$ 199	$ (191)	246,630	168,197	(4,189)
Treasury stock, beginning balance (in shares) at Dec. 31, 2022	5,080		5,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 15,586				15,586
Other comprehensive income (loss), net of tax	443					443
Stock-based compensation	1,853			1,853
Vesting of equity awards, net of tax withholding (in shares)		172,000
Vesting of equity awards, net of tax withholding	(4,141)	$ 1		(4,142)
Clawback of equity awards (in shares)			5,000
Clawback of equity awards	(163)		$ (163)
Cash dividends declared ($0.15 per share)	(3,006)				(3,006)
Dividend equivalents on restricted stock units	$ (106)				(106)
Ending balance (in shares) at Mar. 31, 2023	20,027,637	20,038,000
Ending balance at Mar. 31, 2023	$ 421,112	$ 200	$ (354)	$ 244,341	$ 180,671	$ (3,746)
Treasury stock, ending balance (in shares) at Mar. 31, 2023	10,322		10,000

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 0.15	$ 0.15

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows - operating activities
Net income	$ 15,586	$ 18,467
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	3,873	2,620
Deferred income taxes	6,669	(477)
Stock-based compensation expense	1,853	3,698
Accretion expense related to earnout payments	191	271
Gain on marketable securities	(1,645)	0
Loss on disposal of property and equipment	130	167
Changes in assets and liabilities:
Accounts receivable	(24,332)	(53,142)
Accounts payable	(1,137)	(4,156)
Accrued expenses	(325,975)	(227,424)
Deferred revenue	147	4,137
Income taxes recoverable and payable, net	(3,083)	5,028
Retirement and pension plan assets and liabilities	6,070	3,497
Prepaid expenses	(7,135)	(9,081)
Other assets and liabilities, net	(8,243)	(5,801)
Net cash used in operating activities	(337,031)	(262,196)
Cash flows - investing activities
Acquisition of business, net of cash acquired	(29,907)	0
Capital expenditures	(3,808)	(1,804)
Purchases of marketable securities and investments	(6,172)	(5,011)
Proceeds from sales of marketable securities and investments	267,965	763
Net cash provided by (used in) investing activities	228,078	(6,052)
Cash flows - financing activities
Cash dividends paid	(3,112)	(3,119)
Payment of employee tax withholdings on equity transactions	(4,141)	(3,219)
Acquisition earnout payments	(35,946)	0
Net cash used in financing activities	(43,199)	(6,338)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	1,396	(2,671)
Net decrease in cash, cash equivalents and restricted cash	(150,756)	(277,257)
Cash, cash equivalents and restricted cash at beginning of period	355,489	545,259
Cash, cash equivalents and restricted cash at end of period	$ 204,733	$ 268,002

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Basis of Presentation of Interim Financial Information	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation of Interim Financial Information	Basis of Presentation of Interim Financial Information The accompanying unaudited Condensed Consolidated Financial Statements of Heidrick & Struggles International, Inc. and subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to estimates and assumptions include revenue recognition, income taxes, interim effective tax rate and the assessment of goodwill, other intangible assets and long-lived assets for impairment. Estimates are subject to a degree of uncertainty and actual results could differ from these estimates. In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at March 31, 2023 and December 31, 2022, the results of operations for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022 have been included and are of a normal, recurring nature except as otherwise disclosed. These financial statements and notes are to be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

A complete listing of the Company’s significant accounting policies is discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Revenue Recognition

See Note 3, Revenue.

Cost of Services

Cost of services consists of third-party contractor costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments.

Research and Development

Research and development (“R&D”) expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with the development of new technologies to enhance existing products and services and to expand the range of the Company's offerings. The benefits from the Company's R&D efforts are intended to be utilized to develop and enhance new and existing services and products across the Company's current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that the Company may embark upon in the future from time to time.

Marketable Securities

The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months.

Restricted Cash

The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of March 31, 2023 and 2022, and December 31, 2022 and 2021:

	March 31,				December 31,
	2023		2022		2022		2021
Cash and cash equivalents	$	204,691	$	267,986	$	355,447	$	545,225
Restricted cash included within other non-current assets	42		16		42		34
Total cash, cash equivalents and restricted cash	$	204,733	$	268,002	$	355,489	$	545,259

Earnings per Common Share

Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended March 31,
	2023		2022
Net income	$	15,586	$	18,467
Weighted average shares outstanding:
Basic	19,904		19,624
Effect of dilutive securities:
Restricted stock units	501		650
Performance stock units	164		237
Diluted	20,569		20,511
Basic earnings per share	$	0.78	$	0.94
Diluted earnings per share	$	0.76	$	0.90

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating Lease Right-of-Use Assets, Operating Lease Liabilities - Current and Operating Lease Liabilities - Non-Current in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately.

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance is intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company is currently evaluating the impact of this accounting guidance. The new guidance is not expected to have a material effect on the Company's financial statements.

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Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Executive Search

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred.

The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred.

Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance.  Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months.

The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees.

On-Demand Talent

The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily

responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients.

Heidrick Consulting

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of the Company's consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project.

The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue.

Contract Balances

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Other current assets on the Condensed Consolidated Balance Sheets.

Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees.

Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts.

Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized.

The following table outlines the changes in the contract asset and liability balances from December 31, 2022 to March 31, 2023:

	March 31, 2023		December 31, 2022		Change
Contract assets
Unbilled receivables, net	$	13,322	$	13,940	$	(618)
Contract assets	20,164		21,348		(1,184)
Total contract assets	33,486		35,288		(1,802)
Contract liabilities
Deferred revenue	$	43,345	$	43,057	$	288

During the three months ended March 31, 2023, the Company recognized revenue of $28.5 million that was included in the contract liabilities balance at the beginning of the period. The amount of revenue recognized during the three months ended March 31, 2023 from performance obligations partially satisfied in previous periods as a result of changes in the estimates of variable consideration was $9.5 million.

Each of the Company's contracts has an expected duration of one year or less. Accordingly, the Company has elected to utilize the available practical expedient related to the disclosure of the transaction price allocated to the remaining performance obligations under its contracts. The Company has also elected the available practical expedients related to adjusting for the effects of a significant financing component and the capitalization of contract acquisition costs. The Company charges and collects from its clients sales tax and value added taxes as required by certain jurisdictions. The Company has made an accounting policy election to exclude these items from the transaction price in its contracts.

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Credit Losses

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

Credit Losses

Credit Losses

The Company is exposed to credit losses primarily through the provision of its executive search, consulting, and on-demand talent services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of clients' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for clients that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of clients' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

The activity in the allowance for credit losses on the Company's trade receivables is as follows:

Balance at December 31, 2022	$	6,643
Provision for credit losses	1,970
Write-offs	(1,374)
Foreign currency translation	9
Balance at March 31, 2023	$	7,248

There were no investments with unrealized losses at March 31, 2023. At December 31, 2022, the fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:

	Less Than 12 Months				Balance Sheet Classification
Balance at December 31, 2022	Fair Value		Unrealized Loss		Cash and Cash Equivalents		Marketable Securities
U.S. Treasury securities	$	194,056	$	56	$	11,918	$	182,138

The unrealized loss on one investment in U.S. Treasury securities at December 31, 2022 was caused by fluctuations in market interest rates. The contractual cash flows of these investments are guaranteed by an agency of the U.S. government. Accordingly, it is expected that the investments would not be settled at a price less than the amortized cost basis. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before the recovery of the amortized cost basis.

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Property and Equipment, net

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

The components of the Company’s property and equipment are as follows:

	March 31, 2023		December 31, 2022
Leasehold improvements	$	41,671	$	40,829
Office furniture, fixtures and equipment	14,531		14,322
Computer equipment and software	32,436		30,085
Property and equipment, gross	88,638		85,236
Accumulated depreciation	(56,121)		(55,029)
Property and equipment, net	$	32,517	$	30,207

Depreciation expense for the three months ended March 31, 2023 and 2022 was $2.0 million and $1.8 million, respectively.

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Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

The Company's lease portfolio is comprised of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in the lease term.

As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company has a centrally managed treasury function and, therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment.

Office leases have remaining lease terms that range from less than one year to 10.3 years, some of which also include options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases.

Equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 5.3 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio.

Lease cost components included within General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows:

	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	4,525	$	4,358
Variable lease cost	1,916		$	1,161
Total lease cost	$	6,441	$	5,519

Supplemental cash flow information related to the Company's operating leases is as follows for the three months ended March 31:

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,811	$	5,044
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,570	$	281

The weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, are as follows:

	2023		2022
Weighted Average Remaining Lease Term
Operating leases	6.3 years		6.3 years
Weighted Average Discount Rate
Operating leases	3.49	%	3.25	%

The future maturities of the Company's operating lease liabilities as of March 31, 2023, for the years ended December 31 are as follows:

	Operating Lease Maturity
2023	$	14,468
2024	19,988
2025	12,448
2026	10,926
2027	8,311
Thereafter	24,693
Total lease payments	90,834
Less: Interest	9,399
Present value of lease liabilities	$	81,435

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Financial Instruments and Fair Value

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value

Financial Instruments and Fair Value

Cash, Cash Equivalents and Marketable Securities

The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets until realized.

The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:

	Cash and Cash Equivalents
Balance at March 31, 2023
Cash	$	154,519
Level 1(1):
Money market funds	50,172
Total Level 1	50,172
Total	$	204,691

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Balance at December 31, 2022
Cash									$	247,198	$	—
Level 1(1):
Money market funds									62,338		—
U.S. Treasury securities	$	312,121	$	15	$	(56)	$	312,080	45,911		266,169
Total Level 1	312,121		15		(56)		312,080		108,249		266,169
Total	$	312,121	$	15	$	(56)	$	312,080	$	355,447	$	266,169

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities

The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $35.2 million and $29.1 million as of March 31, 2023 and December 31, 2022, respectively.

The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs.

The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at March 31, 2023
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	42,547	$	—	$	—	$	42,547	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,748		1,269		11,479		—		—		—
Pension benefit obligation	(14,132)		—		—		—		(1,269)		(12,863)
Total Level 2	(1,384)		1,269		11,479		—		(1,269)		(12,863)
Total	$	41,163	$	1,269	$	11,479	$	42,547	$	(1,269)	$	(12,863)

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at December 31, 2022
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	34,354	$	—	$	—	$	34,354	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,584		1,252		11,332		—		—		—
Pension benefit obligation	(13,951)		—		—		—		(1,252)		(12,699)
Total Level 2	(1,367)		1,252		11,332		—		(1,252)		(12,699)
Total	$	32,987	$	1,252	$	11,332	$	34,354	$	(1,252)	$	(12,699)

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

(2)Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Contingent Consideration and Compensation

The former owners of the Company's acquired businesses are eligible to receive contingent consideration or additional cash compensation based on the attainment of certain operating metrics or performance criteria in the periods subsequent to acquisition. Contingent consideration and compensation are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of contingent consideration and compensation using discounted cash flow models.

The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the three months ended March 31, 2023:

	Earnout		Contingent Compensation
Balance at December 31, 2022	$	(36,010)	$	(8,192)
Acquisition earnout (See Note 8, Acquisitions)	(31,995)		—
Earnout accretion	(191)		—
Compensation expense	—		(1,659)
Earnout payments	35,946		—
Foreign currency translation	14		(339)
Balance at March 31, 2023	$	(32,236)	$	(10,190)

Earnout accruals of zero and $36.0 million were recorded within Other current liabilities as of March 31, 2023 and December 31, 2022, respectively, and earnout accruals of $32.2 million and zero were recorded within Other non-current liabilities as of March 31, 2023 and December 31, 2022, respectively. Contingent compensation accruals of $6.1 million and $1.5 million are recorded within current Accrued salaries and benefits as of March 31, 2023 and December 31, 2022, respectively, and contingent compensation accruals of $4.1 million and $6.7 million are recorded within non-current Accrued salaries and benefits as of March 31, 2023 and December 31, 2022, respectively.

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Acquisitions	3 Months Ended
	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
Acquisitions	Acquisitions On February 1, 2023, the Company acquired Atreus Group GmbH ("Atreus"), a leading provider of executive interim management in Germany. The Company paid $33.4 million in the first quarter of 2023, with a subsequent estimated payment of between $9.0 million and $13.0 million to be paid in 2023 upon the completion of Atreus' statutory audit for the year ended December 31, 2022, for all of the outstanding equity of Atreus. The former owners of Atreus are eligible to receive additional cash consideration, which the Company estimated on the acquisition date to be between $30.0 million and $40.0 million, based on the achievement of certain revenue and operating income milestones for the period from the acquisition date through 2025. When estimating the present value of future cash consideration, the Company accrued an estimated $32.0 million as of the acquisition date for the earnout liability. The Company recorded an estimated $11.3 million for customer relationships, $6.9 million for software, $2.5 million for a trade name and $59.2 million of goodwill. Goodwill is primarily related to the acquired workforce and strategic fit and is not deductible for tax purposes. The consideration transferred was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition. The measurement period for purchase price allocation ends when information on the facts and circumstances becomes available, not to exceed twelve months, and the Company expects to finalize its measurements for the acquisition during the second quarter of 2023. As of March 31, 2023, the allocations remain preliminary with regard to customer relationships, software, trade name, goodwill and earnout liability.

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	91,527	$	91,383
Europe	1,468		1,449
Total Executive Search	92,995		92,832
On-Demand Talent	104,716		45,529
Total goodwill	$	197,711	$	138,361

Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the three months ended March 31, 2023, are as follows:

	Executive Search				On-Demand Talent
	Americas		Europe				Total
Balance at December 31, 2022	91,383		1,449		45,529		138,361
Atreus acquisition	—		—		59,219		59,219
Foreign currency translation	144		19		(32)		131
Balance at March 31, 2023	$	91,527	$	1,468	$	104,716	$	197,711

In February 2023, the Company acquired Atreus and recorded an estimated $59.2 million of goodwill related to the acquisition in the On-Demand Talent operating segment.

Other Intangible Assets, net

The Company’s other intangible assets, net by segment, are as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	44	$	51
Europe	179		216
Asia Pacific	11		15
Total Executive Search	234		282
On-Demand Talent	25,029		6,051
Total other intangible assets, net	$	25,263	$	6,333

In February 2023, the Company acquired Atreus and recorded estimated customer relationships short-term, customer relationships long-term, software and trade name intangible assets in the On-Demand Talent operating segment of $6.0 million, $5.3 million, $6.9 million and $2.5 million, respectively. The combined estimated weighted-average amortization period for the acquired intangible assets is 6.2 years with estimated amortization periods of 5.0, 14.0, 3.0 and 3.0 years for the customer relationships short-term, customer relationships long-term, software and trade name, respectively.

The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:

	Weighted Average Life (Years)	March 31, 2023						December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Client relationships	9.7	$	22,072	$	(7,036)	$	15,036	$	10,720	$	(6,164)	$	4,556
Trade name	3.0	4,501		(1,857)		2,644		2,406		(1,925)		481
Software	3.0	10,049		(2,466)		7,583		3,110		(1,814)		1,296
Total intangible assets	7.0	$	36,622	$	(11,359)	$	25,263	$	16,236	$	(9,903)	$	6,333

Intangible asset amortization expense for the three months ended March 31, 2023 and 2022 was $1.9 million and $0.8 million, respectively.

The Company's estimated future amortization expense related to intangible assets as of March 31, 2023, for the following years ended December 31 is as follows:

2023	$	6,659
2024	7,032
2025	5,565
2026	2,080
2027	1,265
Thereafter	2,662
Total	$	25,263

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Other Current and Non-current Assets and Liabilities

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current and Non-current Assets and Liabilities

Other Current and Non-current Assets and Liabilities

The components of other current assets are as follows:

	March 31, 2023		December 31, 2022
Contract assets	$	33,486	$	35,288
Other	9,344		5,434
Total other current assets	$	42,830	$	40,722

The components of other current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	—	$	36,010
Other	33,318		20,006
Total other current liabilities	$	33,318	$	56,016

The components of other non-current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	32,236	$	—
Other	4,542		5,293
Total other non-current liabilities	$	36,778	$	5,293

Other Current and Non-current Assets and Liabilities

Other Current and Non-current Assets and Liabilities

The components of other current assets are as follows:

	March 31, 2023		December 31, 2022
Contract assets	$	33,486	$	35,288
Other	9,344		5,434
Total other current assets	$	42,830	$	40,722

The components of other current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	—	$	36,010
Other	33,318		20,006
Total other current liabilities	$	33,318	$	56,016

The components of other non-current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	32,236	$	—
Other	4,542		5,293
Total other non-current liabilities	$	36,778	$	5,293

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Line of Credit

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Line of Credit

Line of Credit

On February 24, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement, dated as of October 26, 2018 (the “Credit Agreement” and, as amended by the First Amendment to Credit Agreement, dated as of July 13,2021, and the Second Amendment, the "Amended Credit Agreement") by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Second Amendment replaced the interest rate benchmark, from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). At the Company's option, borrowings under the Amended Credit Agreement will bear interest at one-, three- or six-month Term SOFR, or an alternate base rate as set forth in the Amended Credit Agreement, in each case plus an applicable margin. Additionally, the Second Amendment provided the Company with a committed unsecured revolving credit facility in an aggregate amount of $200 million, increased from $175 million as set forth in the Credit Agreement, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature. Other than the foregoing, the material terms of the Amended Credit Agreement remain unchanged. The Amended Credit Agreement matures on July 13, 2026.

Borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Amended Credit Agreement are guaranteed by certain of the Company’s subsidiaries.

As of March 31, 2023 and December 31, 2022, the Company had no outstanding borrowings. The Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company's Third Amended and Restated Heidrick & Struggles 2012 GlobalShare Program (the "Third A&R Program") provides for grants of stock options, stock appreciation rights, restricted stock units, performance stock units, and other stock-based compensation awards that are valued based upon the grant date fair value of the awards. These awards may be granted to directors, selected employees and independent contractors.

As of March 31, 2023, 3,796,496 awards have been issued under the Third A&R Program, including 768,409 forfeited awards, and 321,913 shares remain available for future awards. The Third A&R Program provides that no awards can be granted after May 28, 2028.

The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs over the requisite service period.

A summary of information with respect to stock-based compensation is as follows:

	Three Months Ended March 31,
	2023		2022
Salaries and benefits (1)	$	2,597	$	2,904
Income tax benefit related to stock-based compensation included in net income	715		790

(1) Includes $0.8 million of expense and $0.8 million of income related to cash-settled restricted stock units for the three months ended March 31, 2023 and 2022, respectively.

Restricted Stock Units

Restricted stock units are subject to ratable vesting over a three-year or four-year period dependent upon the terms of the individual grant. Compensation expense related to service-based restricted stock units is recognized on a straight-line basis over the vesting period.

Restricted stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Restricted Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	728,285	$	31.97
Granted	—	—
Vested and converted to common stock	(171,420)	33.07
Forfeited	(9,777)	29.55
Outstanding on March 31, 2023	547,088	$	31.67

As of March 31, 2023, there was $4.9 million of pre-tax unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted average of 2.1 years.

Performance Stock Units

The Company grants performance stock units to certain of its senior executives. The performance stock units are generally subject to cliff vesting at the end of a three-year period. The vesting will vary between 0% and 200% based on the attainment of certain performance and market conditions over the three-year vesting period. Half of the award is based on the achievement of operating margin thresholds and half of the award is based on the Company's total shareholder return, relative to a peer group. The fair value of the awards subject to total shareholder return metrics is determined using the Monte Carlo simulation model. A Monte Carlo simulation model uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions and the resulting fair value of the award. The performance stock units are expensed on a straight-line basis over the three-year vesting period.

Performance stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Performance Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	260,452	$	40.02
Granted	26,660	33.27
Vested and converted to common stock	(124,743)	31.51
Forfeited	—	—
Outstanding on March 31, 2023	162,369	$	45.46

As of March 31, 2023, there was $4.3 million of pre-tax unrecognized compensation expense related to unvested performance stock units, which is expected to be recognized over a weighted average of 1.6 years.

Phantom Stock Units

Phantom stock units are grants of phantom stock with respect to shares of the Company's common stock that are settled in cash and are subject to various restrictions, including restrictions on transferability, vesting and forfeiture provisions. Shares of phantom stock that do not vest for any reason will be forfeited by the recipient and will revert to the Company.

Phantom stock units are subject to vesting over a period of four years, and such vesting is subject to certain other conditions, including continued service to the Company. As a result of the cash-settlement feature of the awards, the Company classifies the awards as liability awards, which are measured at fair value at each reporting date and the vested portion of the award is recognized as a liability to the extent that the service condition is deemed probable. The fair value of the phantom stock awards on the balance sheet date is determined using the closing share price of the Company's common stock on that date.

The Company recorded phantom stock-based compensation expense of $0.8 million and income of $0.8 million during the three months ended March 31, 2023 and 2022, respectively.

Phantom stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Phantom Stock Units
Outstanding on December 31, 2022	321,155
Granted	—
Vested	—
Forfeited	(9,775)
Outstanding on March 31, 2023	311,380

As of March 31, 2023, there was $1.9 million of pre-tax unrecognized compensation expense related to unvested phantom stock units, which is expected to be recognized over a weighted average of 2.8 years.

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Restructuring

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

During the year ended December 31, 2020, the Company implemented a restructuring plan (the "2020 Plan") to optimize future growth and profitability. The primary components of the 2020 Plan included a workforce reduction, a reduction of the Company's real estate expenses and professional fees, and the elimination of certain deferred compensation programs. The Company did not incur any charges during the three months ended March 31, 2023 and 2022 and does not anticipate incurring any future charges under the 2020 Plan.

Changes in the restructuring accrual for the three months ended March 31, 2023 were as follows:

	Employee Related
Accrual balance at December 31, 2022	3,422
Cash payments	(3,516)
Non-cash write-offs	—
Exchange rate fluctuations	94
Accrual balance at March 31, 2023	$	—

Restructuring accruals associated with the elimination of certain deferred compensation programs of $3.4 million were recorded within current Accrued salaries and benefits in the Consolidated Balance Sheets as of December 31, 2022.

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Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company reported income before taxes of $22.8 million and an income tax provision of $7.2 million for the three months ended March 31, 2023. The Company reported income before taxes of $27.9 million and an income tax provision of $9.4 million for the three months ended March 31, 2022. The effective tax rates for the three months ended March 31, 2023 and 2022, were 31.7% and 33.7%, respectively. The effective tax rates for the three months ended March 31, 2023 and 2022, were each impacted by one-time items and the mix of income.

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Changes in Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the three months ended March 31, 2023 are as follows:

	Available- for- Sale Securities		Foreign Currency Translation		Pension		AOCI
Balance at December 31, 2022	$	(41)	$	(4,163)	$	15	$	(4,189)
Other comprehensive income before reclassification, net of tax	41		402		—		443
Balance at March 31, 2023	$	—	$	(3,761)	$	15	$	(3,746)

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Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company has five operating segments. The Executive Search business operates in the Americas, Europe (which includes Africa) and Asia Pacific (which includes the Middle East), and the Heidrick Consulting and On-Demand Talent businesses operate globally.

For segment purposes, reimbursements of out-of-pocket expenses classified as revenue and other operating income are reported separately and, therefore, are not included in the results of each segment. The Company believes that analyzing trends in revenue before reimbursements (net revenue), analyzing operating expenses as a percentage of net revenue, and analyzing operating income, more appropriately reflect its core operations.

Revenue and operating income by segment are as follows:

	Three Months Ended March 31,
	2023		2022
Revenue
Executive Search
Americas	$	127,327	$	162,553
Europe	38,931		49,745
Asia Pacific	24,229		30,251
Total Executive Search	190,487		242,549
On-Demand Talent	31,117		23,381
Heidrick Consulting	17,713		17,931
Revenue before reimbursements (net revenue)	239,317		283,861
Reimbursements	2,802		1,676
Total revenue	$	242,119	$	285,537

	Three Months Ended March 31,
	2023		2022
Operating income (loss)
Executive Search
Americas	$	38,699	$	39,851
Europe	1,712		5,403
Asia Pacific	3,282		5,054
Total Executive Search	43,693		50,308
On-Demand Talent	(4,364)		(582)
Heidrick Consulting	(3,116)		(2,084)
Total segment operating income	36,213		47,642
Research and Development	(5,528)		(4,402)
Global Operations Support	(12,914)		(13,008)
Total operating income	$	17,771	$	30,232

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Guarantees	3 Months Ended
	Mar. 31, 2023
Guarantees and Product Warranties [Abstract]
Guarantees	Guarantees The Company has utilized letters of credit to support certain obligations, primarily for its office lease agreements. The letters of credit were made to secure the respective agreements and are for the terms of the agreements, which extend through 2033. For each letter of credit issued, the Company would have to use cash to fulfill the obligation if there is a default on a payment. The maximum amount of undiscounted payments the Company would be required to make in the event of default on all outstanding letters of credit is approximately $4.6 million as of March 31, 2023. The Company has not accrued for these arrangements as no event of default exists or is expected to exist.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

The Company has contingent liabilities from various pending claims and litigation matters arising in the ordinary course of the Company’s business, some of which involve claims for damages that are substantial in amount. Some of these matters are covered in part by insurance. Based upon information currently available, the Company believes the ultimate resolution of such claims and litigation will not have a material adverse effect on its financial condition, results of operations or liquidity.

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Subsequent Event	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event On April 1, 2023, the Company acquired businessfourzero, a next generation consultancy specializing in developing and implementing purpose-driven change. Initial consideration of $9.5 million was paid in the second quarter of 2023 with an anticipated future payment in 2026, based on the achievement of certain revenue and operating income metrics for the period from the acquisition date through 2025, which the Company estimates to be between $4.0 million and $8.0 million as of the acquisition date.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Cost of Services

Cost of Services

Cost of services consists of third-party contractor costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments.

Research and Development

Research and Development

Research and development (“R&D”) expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with the development of new technologies to enhance existing products and services and to expand the range of the Company's offerings. The benefits from the Company's R&D efforts are intended to be utilized to develop and enhance new and existing services and products across the Company's current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that the Company may embark upon in the future from time to time.

Marketable Securities

Marketable Securities

The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months.

Restricted Cash

Restricted Cash

The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of March 31, 2023 and 2022, and December 31, 2022 and 2021:

	March 31,				December 31,
	2023		2022		2022		2021
Cash and cash equivalents	$	204,691	$	267,986	$	355,447	$	545,225
Restricted cash included within other non-current assets	42		16		42		34
Total cash, cash equivalents and restricted cash	$	204,733	$	268,002	$	355,489	$	545,259

Earnings per Common Share

Earnings per Common Share

Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended March 31,
	2023		2022
Net income	$	15,586	$	18,467
Weighted average shares outstanding:
Basic	19,904		19,624
Effect of dilutive securities:
Restricted stock units	501		650
Performance stock units	164		237
Diluted	20,569		20,511
Basic earnings per share	$	0.78	$	0.94
Diluted earnings per share	$	0.76	$	0.90

Leases

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating Lease Right-of-Use Assets, Operating Lease Liabilities - Current and Operating Lease Liabilities - Non-Current in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately.

Recently Issued Financial Accounting Standards

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance is intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company is currently evaluating the impact of this accounting guidance. The new guidance is not expected to have a material effect on the Company's financial statements.

Revenue Recognition

Executive Search

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred.

The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred.

Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance.  Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months.

The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees.

On-Demand Talent

The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily

responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients.

Heidrick Consulting

Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of the Company's consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project.

The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue.

Contract Balances

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Other current assets on the Condensed Consolidated Balance Sheets.

Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees.

Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts.

Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Restrictions on Cash and Cash Equivalents

The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of March 31, 2023 and 2022, and December 31, 2022 and 2021:

	March 31,				December 31,
	2023		2022		2022		2021
Cash and cash equivalents	$	204,691	$	267,986	$	355,447	$	545,225
Restricted cash included within other non-current assets	42		16		42		34
Total cash, cash equivalents and restricted cash	$	204,733	$	268,002	$	355,489	$	545,259

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended March 31,
	2023		2022
Net income	$	15,586	$	18,467
Weighted average shares outstanding:
Basic	19,904		19,624
Effect of dilutive securities:
Restricted stock units	501		650
Performance stock units	164		237
Diluted	20,569		20,511
Basic earnings per share	$	0.78	$	0.94
Diluted earnings per share	$	0.76	$	0.90

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Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Contract with Customer, Contract Asset, Contract Liability, and Receivable

The following table outlines the changes in the contract asset and liability balances from December 31, 2022 to March 31, 2023:

	March 31, 2023		December 31, 2022		Change
Contract assets
Unbilled receivables, net	$	13,322	$	13,940	$	(618)
Contract assets	20,164		21,348		(1,184)
Total contract assets	33,486		35,288		(1,802)
Contract liabilities
Deferred revenue	$	43,345	$	43,057	$	288

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Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

Accounts Receivable, Allowance for Credit Loss

The activity in the allowance for credit losses on the Company's trade receivables is as follows:

Balance at December 31, 2022	$	6,643
Provision for credit losses	1,970
Write-offs	(1,374)
Foreign currency translation	9
Balance at March 31, 2023	$	7,248

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

There were no investments with unrealized losses at March 31, 2023. At December 31, 2022, the fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, are as follows:

	Less Than 12 Months				Balance Sheet Classification
Balance at December 31, 2022	Fair Value		Unrealized Loss		Cash and Cash Equivalents		Marketable Securities
U.S. Treasury securities	$	194,056	$	56	$	11,918	$	182,138

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Property and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

The components of the Company’s property and equipment are as follows:

	March 31, 2023		December 31, 2022
Leasehold improvements	$	41,671	$	40,829
Office furniture, fixtures and equipment	14,531		14,322
Computer equipment and software	32,436		30,085
Property and equipment, gross	88,638		85,236
Accumulated depreciation	(56,121)		(55,029)
Property and equipment, net	$	32,517	$	30,207

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Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Lease, Cost

Lease cost components included within General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows:

	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	4,525	$	4,358
Variable lease cost	1,916		$	1,161
Total lease cost	$	6,441	$	5,519

Supplemental cash flow information related to the Company's operating leases is as follows for the three months ended March 31:

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,811	$	5,044
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,570	$	281

Assets And Liabilities, Lessee

The weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, are as follows:

	2023		2022
Weighted Average Remaining Lease Term
Operating leases	6.3 years		6.3 years
Weighted Average Discount Rate
Operating leases	3.49	%	3.25	%

Lessee, Operating Lease, Liability, Maturity

The future maturities of the Company's operating lease liabilities as of March 31, 2023, for the years ended December 31 are as follows:

	Operating Lease Maturity
2023	$	14,468
2024	19,988
2025	12,448
2026	10,926
2027	8,311
Thereafter	24,693
Total lease payments	90,834
Less: Interest	9,399
Present value of lease liabilities	$	81,435

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Financial Instruments and Fair Value (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Unrealized Gain (Loss) on Investments

The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:

	Cash and Cash Equivalents
Balance at March 31, 2023
Cash	$	154,519
Level 1(1):
Money market funds	50,172
Total Level 1	50,172
Total	$	204,691

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Balance at December 31, 2022
Cash									$	247,198	$	—
Level 1(1):
Money market funds									62,338		—
U.S. Treasury securities	$	312,121	$	15	$	(56)	$	312,080	45,911		266,169
Total Level 1	312,121		15		(56)		312,080		108,249		266,169
Total	$	312,121	$	15	$	(56)	$	312,080	$	355,447	$	266,169

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

Fair Value, by Balance Sheet Grouping

The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at March 31, 2023
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	42,547	$	—	$	—	$	42,547	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,748		1,269		11,479		—		—		—
Pension benefit obligation	(14,132)		—		—		—		(1,269)		(12,863)
Total Level 2	(1,384)		1,269		11,479		—		(1,269)		(12,863)
Total	$	41,163	$	1,269	$	11,479	$	42,547	$	(1,269)	$	(12,863)

			Balance Sheet Classification
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at December 31, 2022
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	34,354	$	—	$	—	$	34,354	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,584		1,252		11,332		—		—		—
Pension benefit obligation	(13,951)		—		—		—		(1,252)		(12,699)
Total Level 2	(1,367)		1,252		11,332		—		(1,252)		(12,699)
Total	$	32,987	$	1,252	$	11,332	$	34,354	$	(1,252)	$	(12,699)

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

(2)Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the three months ended March 31, 2023:

	Earnout		Contingent Compensation
Balance at December 31, 2022	$	(36,010)	$	(8,192)
Acquisition earnout (See Note 8, Acquisitions)	(31,995)		—
Earnout accretion	(191)		—
Compensation expense	—		(1,659)
Earnout payments	35,946		—
Foreign currency translation	14		(339)
Balance at March 31, 2023	$	(32,236)	$	(10,190)

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	91,527	$	91,383
Europe	1,468		1,449
Total Executive Search	92,995		92,832
On-Demand Talent	104,716		45,529
Total goodwill	$	197,711	$	138,361

Schedule of Goodwill

Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the three months ended March 31, 2023, are as follows:

	Executive Search				On-Demand Talent
	Americas		Europe				Total
Balance at December 31, 2022	91,383		1,449		45,529		138,361
Atreus acquisition	—		—		59,219		59,219
Foreign currency translation	144		19		(32)		131
Balance at March 31, 2023	$	91,527	$	1,468	$	104,716	$	197,711

Schedule of Finite-Lived Intangible Assets

The Company’s other intangible assets, net by segment, are as follows:

	March 31, 2023		December 31, 2022
Executive Search
Americas	$	44	$	51
Europe	179		216
Asia Pacific	11		15
Total Executive Search	234		282
On-Demand Talent	25,029		6,051
Total other intangible assets, net	$	25,263	$	6,333

The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:

	Weighted Average Life (Years)	March 31, 2023						December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Client relationships	9.7	$	22,072	$	(7,036)	$	15,036	$	10,720	$	(6,164)	$	4,556
Trade name	3.0	4,501		(1,857)		2,644		2,406		(1,925)		481
Software	3.0	10,049		(2,466)		7,583		3,110		(1,814)		1,296
Total intangible assets	7.0	$	36,622	$	(11,359)	$	25,263	$	16,236	$	(9,903)	$	6,333

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The Company's estimated future amortization expense related to intangible assets as of March 31, 2023, for the following years ended December 31 is as follows:

2023	$	6,659
2024	7,032
2025	5,565
2026	2,080
2027	1,265
Thereafter	2,662
Total	$	25,263

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Other Current and Non-current Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Current Assets

The components of other current assets are as follows:

	March 31, 2023		December 31, 2022
Contract assets	$	33,486	$	35,288
Other	9,344		5,434
Total other current assets	$	42,830	$	40,722

Other Current Liabilities

The components of other current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	—	$	36,010
Other	33,318		20,006
Total other current liabilities	$	33,318	$	56,016

Other Noncurrent Liabilities

The components of other non-current liabilities are as follows:

	March 31, 2023		December 31, 2022
Earnout liability	$	32,236	$	—
Other	4,542		5,293
Total other non-current liabilities	$	36,778	$	5,293

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Expensed and Capitalized, Amount

A summary of information with respect to stock-based compensation is as follows:

	Three Months Ended March 31,
	2023		2022
Salaries and benefits (1)	$	2,597	$	2,904
Income tax benefit related to stock-based compensation included in net income	715		790

(1) Includes $0.8 million of expense and $0.8 million of income related to cash-settled restricted stock units for the three months ended March 31, 2023 and 2022, respectively.

Share-based Payment Arrangement, Restricted Stock Unit, Activity

Restricted stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Restricted Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	728,285	$	31.97
Granted	—	—
Vested and converted to common stock	(171,420)	33.07
Forfeited	(9,777)	29.55
Outstanding on March 31, 2023	547,088	$	31.67

Share-based Payment Arrangement, Performance Shares, Outstanding Activity

Performance stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Performance Stock Units	Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2022	260,452	$	40.02
Granted	26,660	33.27
Vested and converted to common stock	(124,743)	31.51
Forfeited	—	—
Outstanding on March 31, 2023	162,369	$	45.46

Share-Based Compensation, Phantom Shares Award Outstanding Activity

Phantom stock unit activity for the three months ended March 31, 2023 is as follows:

	Number of Phantom Stock Units
Outstanding on December 31, 2022	321,155
Granted	—
Vested	—
Forfeited	(9,775)
Outstanding on March 31, 2023	311,380

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Restructuring (Tables)

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

Changes in the restructuring accrual for the three months ended March 31, 2023 were as follows:

	Employee Related
Accrual balance at December 31, 2022	3,422
Cash payments	(3,516)
Non-cash write-offs	—
Exchange rate fluctuations	94
Accrual balance at March 31, 2023	$	—

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Changes in Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the three months ended March 31, 2023 are as follows:

	Available- for- Sale Securities		Foreign Currency Translation		Pension		AOCI
Balance at December 31, 2022	$	(41)	$	(4,163)	$	15	$	(4,189)
Other comprehensive income before reclassification, net of tax	41		402		—		443
Balance at March 31, 2023	$	—	$	(3,761)	$	15	$	(3,746)

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Revenue and operating income by segment are as follows:

	Three Months Ended March 31,
	2023		2022
Revenue
Executive Search
Americas	$	127,327	$	162,553
Europe	38,931		49,745
Asia Pacific	24,229		30,251
Total Executive Search	190,487		242,549
On-Demand Talent	31,117		23,381
Heidrick Consulting	17,713		17,931
Revenue before reimbursements (net revenue)	239,317		283,861
Reimbursements	2,802		1,676
Total revenue	$	242,119	$	285,537

	Three Months Ended March 31,
	2023		2022
Operating income (loss)
Executive Search
Americas	$	38,699	$	39,851
Europe	1,712		5,403
Asia Pacific	3,282		5,054
Total Executive Search	43,693		50,308
On-Demand Talent	(4,364)		(582)
Heidrick Consulting	(3,116)		(2,084)
Total segment operating income	36,213		47,642
Research and Development	(5,528)		(4,402)
Global Operations Support	(12,914)		(13,008)
Total operating income	$	17,771	$	30,232

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Summary of Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents between Balance Sheet and Cash Flow Statements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 204,691	$ 355,447	$ 267,986	$ 545,225
Total cash, cash equivalents and restricted cash	204,733	355,489	268,002	545,259
Other non-current assets
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash included within other non-current assets	$ 42	$ 42	$ 16	$ 34

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Summary of Significant Accounting Policies - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ 15,586	$ 18,467
Weighted average shares outstanding:
Basic (in shares)	19,904,000	19,624,000
Diluted (in shares)	20,569,000	20,511,000
Basic earnings per share (in dollars per share)	$ 0.78	$ 0.94
Diluted earnings per share (in dollars per share)	$ 0.76	$ 0.90
Restricted stock units
Weighted average shares outstanding:
Effect of dilutive securities:	501,000	650,000
Performance stock units
Weighted average shares outstanding:
Effect of dilutive securities:	164,000	237,000

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Revenue - Summary of Changes in Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Contract assets
Unbilled receivables, net	$ 13,322	$ 13,940
Contract assets	20,164	21,348
Total contract assets	33,486	35,288
Contract liabilities
Deferred revenue	43,345	$ 43,057
Change in contract assets
Unbilled receivables, net	(618)
Contract assets	(1,184)
Total contract assets	(1,802)
Change in contract liabilities
Deferred revenue	$ 288

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Revenue - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue recognized	$ 28.5
Contract with customer, performance obligation satisfied in previous period	$ 9.5
Revenue, performance obligation, description of timing	six months
Heidrick Consulting
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, performance obligation, description of timing	twelve months

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Credit Losses - Activity in Allowance for Credit Loss for Trade Receivable (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at December 31, 2022	$ 6,643
Provision for credit losses	1,970
Write-offs	(1,374)
Foreign currency translation	9
Balance at March 31, 2023	$ 7,248

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Credit Losses - Fair Value and Unrealized Losses on Available-for-Sale Debt Securities (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]
Fair Value	$ 312,080
U.S. Treasury securities
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]
Fair Value	194,056
Unrealized Loss	56
Cash and Cash Equivalents | U.S. Treasury securities
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]
Fair Value	11,918
Marketable Securities | U.S. Treasury securities
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]
Fair Value	$ 182,138

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Credit Losses - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) investment
Credit Loss [Abstract]
Debt securities, available-for-sale, unrealized loss | $	$ 0
Debt Securities, Available-for-Sale, Unrealized Loss Position, Number of Positions | investment	1

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Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 88,638	$ 85,236
Accumulated depreciation	(56,121)	(55,029)
Property and equipment, net	32,517	30,207
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	41,671	40,829
Office furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,531	14,322
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 32,436	$ 30,085

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Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation	$ 2.0	$ 1.8

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Leases - Narrative (Details)	Mar. 31, 2023
Minimum | Equipment
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract (in years)	1 year
Minimum | Building
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract (in years)	1 year
Maximum | Equipment
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract (in years)	5 years 3 months 18 days
Maximum | Building
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract (in years)	10 years 3 months 18 days

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease cost	$ 4,525	$ 4,358
Variable lease cost	1,916	1,161
Total lease cost	$ 6,441	$ 5,519

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating cash flows from operating leases	$ 4,811	$ 5,044
Right-of-use assets obtained in exchange for lease obligations:	$ 2,570	$ 281

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Leases - Weighted Average Information (Details)	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Weighted Average Remaining Lease Term	6 years 3 months 18 days	6 years 3 months 18 days
Weighted Average Discount Rate	3.49%	3.25%

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Leases - Future Maturities of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
2023	$ 14,468
2024	19,988
2025	12,448
2026	10,926
2027	8,311
Thereafter	24,693
Total lease payments	90,834
Less: Interest	9,399
Present value of lease liabilities	$ 81,435

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Financial Instruments and Fair Value - Cash, Cash Equivalents, and Marketable Securities by Significant Investment Category (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 204,691	$ 355,447	$ 267,986	$ 545,225
Amortized Cost		312,121
Unrealized Gains		15
Unrealized Losses		(56)
Fair Value		312,080
Marketable Securities		266,169
Cash
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities		0
Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	50,172	108,249
Amortized Cost		312,121
Unrealized Gains		15
Unrealized Losses		(56)
Fair Value		312,080
Marketable Securities		266,169
Fair Value, Inputs, Level 1 | U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost		312,121
Unrealized Gains		15
Unrealized Losses		(56)
Fair Value		312,080
Marketable Securities		266,169
Fair Value, Inputs, Level 1 | Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities		0
Cash
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	154,519	247,198
Money market funds | Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 50,172	62,338
U.S. Treasury securities | Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents		$ 45,911

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Financial Instruments and Fair Value - Narrative (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate cost basis for non-qualified deferred compensation plan	$ 35,200,000	$ 29,100,000
Earnout | Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	32,236,000	36,010,000
Earnout | Fair Value, Inputs, Level 3 | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	0	36,000,000
Earnout | Fair Value, Inputs, Level 3 | Other Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	32,200,000	0
Contingent Compensation | Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	10,190,000	8,192,000
Contingent Compensation | Fair Value, Inputs, Level 3 | Current accrued salaries and benefits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	6,100,000	1,500,000
Contingent Compensation | Fair Value, Inputs, Level 3 | Non-current accrued salaries and benefits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Earnout liability	$ 4,100,000	$ 6,700,000

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Financial Instruments and Fair Value - Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	$ 41,163	$ 32,987
Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	1,269	1,252
Assets Designated for Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	11,479	11,332
Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	42,547	34,354
Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	(1,269)	(1,252)
Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	(12,863)	(12,699)
Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	42,547	34,354
Fair Value, Inputs, Level 1 | Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	0	0
Fair Value, Inputs, Level 1 | Assets Designated for Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	0	0
Fair Value, Inputs, Level 1 | Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	42,547	34,354
Fair Value, Inputs, Level 1 | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	0	0
Fair Value, Inputs, Level 1 | Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. non-qualified deferred compensation plan	0	0
Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	12,748	12,584
Pension benefit obligation	(14,132)	(13,951)
Total	(1,384)	(1,367)
Fair Value, Inputs, Level 2 | Other Current Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	1,269	1,252
Pension benefit obligation	0	0
Total	1,269	1,252
Fair Value, Inputs, Level 2 | Assets Designated for Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	11,479	11,332
Pension benefit obligation	0	0
Total	11,479	11,332
Fair Value, Inputs, Level 2 | Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	0	0
Pension benefit obligation	0	0
Total	0	0
Fair Value, Inputs, Level 2 | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	0	0
Pension benefit obligation	(1,269)	(1,252)
Total	(1,269)	(1,252)
Fair Value, Inputs, Level 2 | Retirement and Pension Plans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Retirement and pension plan assets	0	0
Pension benefit obligation	(12,863)	(12,699)
Total	$ (12,863)	$ (12,699)

XML

Financial Instruments and Fair Value - Level 3 Liabilities (Details) - Fair Value, Inputs, Level 3 $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Earnout
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2022	$ (36,010)
Acquisition earnout (See Note 8, Acquisitions)	(31,995)
Earnout accretion	(191)
Compensation expense	0
Earnout payments	35,946
Foreign currency translation	14
Balance at March 31, 2023	(32,236)
Contingent Compensation
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2022	(8,192)
Acquisition earnout (See Note 8, Acquisitions)	0
Earnout accretion	0
Compensation expense	(1,659)
Earnout payments	0
Foreign currency translation	(339)
Balance at March 31, 2023	$ (10,190)

XML

Acquisitions (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 01, 2023	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2023	Feb. 28, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Payments to acquire businesses, gross		$ 29,907	$ 0
Goodwill		197,711				$ 138,361
Revenue before reimbursements (net revenue)		239,317	283,861
Operating income (loss)		17,771	$ 30,232
Earnout | Fair Value, Inputs, Level 3
Business Acquisition [Line Items]
Acquisition earnout accrued		31,995
Atreus
Business Acquisition [Line Items]
Payments to acquire businesses, gross	$ 33,400
Future consideration, minimum	30,000
Future consideration, maximum	40,000
Goodwill	59,200
Atreus | Earnout | Fair Value, Inputs, Level 3
Business Acquisition [Line Items]
Acquisition earnout accrued		$ 32,000
Atreus | Client relationships
Business Acquisition [Line Items]
Finite-lived intangibles acquired	11,300
Atreus | Software
Business Acquisition [Line Items]
Finite-lived intangibles acquired	6,900
Atreus | Trade name
Business Acquisition [Line Items]
Finite-lived intangibles acquired	$ 2,500				$ 2,500
Atreus | Maximum | Forecast
Business Acquisition [Line Items]
Payments to acquire businesses, gross				$ 13,000
Atreus | Minimum | Forecast
Business Acquisition [Line Items]
Payments to acquire businesses, gross				$ 9,000

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Goodwill and Other Intangible Assets - Goodwill by Segment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill [Line Items]
Goodwill	$ 197,711	$ 138,361
Executive Search
Goodwill [Line Items]
Goodwill	92,995	92,832
Executive Search | Americas
Goodwill [Line Items]
Goodwill	91,527	91,383
Executive Search | Europe
Goodwill [Line Items]
Goodwill	1,468	1,449
On-Demand Talent
Goodwill [Line Items]
Goodwill	$ 104,716	$ 45,529

XML

Goodwill and Other Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 138,361
Foreign currency translation	131
Goodwill, ending balance	197,711
Atreus
Goodwill [Roll Forward]
Atreus acquisition	59,219
Executive Search
Goodwill [Roll Forward]
Goodwill, beginning balance	92,832
Goodwill, ending balance	92,995
On-Demand Talent
Goodwill [Roll Forward]
Goodwill, beginning balance	45,529
Foreign currency translation	(32)
Goodwill, ending balance	104,716
On-Demand Talent | Atreus
Goodwill [Roll Forward]
Atreus acquisition	59,219
Americas | Executive Search
Goodwill [Roll Forward]
Goodwill, beginning balance	91,383
Foreign currency translation	144
Goodwill, ending balance	91,527
Americas | Executive Search | Atreus
Goodwill [Roll Forward]
Atreus acquisition	0
Europe | Executive Search
Goodwill [Roll Forward]
Goodwill, beginning balance	1,449
Foreign currency translation	19
Goodwill, ending balance	1,468
Europe | Executive Search | Atreus
Goodwill [Roll Forward]
Atreus acquisition	$ 0

XML

Goodwill and Other Intangible Assets - Other Intangible Assets by Segment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	$ 25,263	$ 6,333
Executive Search
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	234	282
On-Demand Talent
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	25,029	6,051
Americas | Executive Search
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	44	51
Europe | Executive Search
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	179	216
Asia Pacific | Executive Search
Finite-Lived Intangible Assets [Line Items]
Total other intangible assets, net	$ 11	$ 15

XML

Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets and Accumulated Amortization (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (Years)	7 years
Gross Carrying Amount	$ 36,622	$ 16,236
Accumulated Amortization	(11,359)	(9,903)
Total other intangible assets, net	$ 25,263	6,333
Client relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (Years)	9 years 8 months 12 days
Gross Carrying Amount	$ 22,072	10,720
Accumulated Amortization	(7,036)	(6,164)
Total other intangible assets, net	$ 15,036	4,556
Trade name
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (Years)	3 years
Gross Carrying Amount	$ 4,501	2,406
Accumulated Amortization	(1,857)	(1,925)
Total other intangible assets, net	$ 2,644	481
Software
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (Years)	3 years
Gross Carrying Amount	$ 10,049	3,110
Accumulated Amortization	(2,466)	(1,814)
Total other intangible assets, net	$ 7,583	$ 1,296

XML

Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Feb. 28, 2023	Mar. 31, 2023	Mar. 31, 2022	Feb. 01, 2023
Goodwill [Line Items]
Amortization period (in years)		7 years
Amortization of intangible assets		$ 1,900	$ 800
Software
Goodwill [Line Items]
Amortization period (in years)		3 years
Trade name
Goodwill [Line Items]
Amortization period (in years)		3 years
Atreus
Goodwill [Line Items]
Goodwill, acquired during period		$ 59,219
Amortization period (in years)	6 years 2 months 12 days
Atreus | Customer relationships, short-term
Goodwill [Line Items]
Finite-lived intangibles acquired	$ 6,000
Amortization period (in years)	5 years
Atreus | Customer relationships, long-term
Goodwill [Line Items]
Finite-lived intangibles acquired	$ 5,300
Amortization period (in years)	14 years
Atreus | Software
Goodwill [Line Items]
Finite-lived intangibles acquired	$ 6,900
Amortization period (in years)	3 years
Atreus | Trade name
Goodwill [Line Items]
Finite-lived intangibles acquired	$ 2,500			$ 2,500
Amortization period (in years)	3 years

XML

Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 6,659
2024	7,032
2025	5,565
2026	2,080
2027	1,265
Thereafter	2,662
Total other intangible assets, net	$ 25,263	$ 6,333

XML

Other Current and Non-current Assets and Liabilities - Components of Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Contract assets	$ 33,486	$ 35,288
Other	9,344	5,434
Other current assets	$ 42,830	$ 40,722

XML

Other Current and Non-current Assets and Liabilities- Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Earnout liability	$ 0	$ 36,010
Other	33,318	20,006
Other current liabilities	$ 33,318	$ 56,016

XML

Other Current and Non-current Assets and Liabilities - Schedule of Other Non-Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Earnout liability	$ 32,236	$ 0
Other	4,542	5,293
Other non-current liabilities	$ 36,778	$ 5,293

XML

Line of Credit (Details) - The Credit Agreement - Line of Credit - USD ($)	Feb. 24, 2023	Mar. 31, 2023	Feb. 23, 2023	Dec. 31, 2022
Letter of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 200,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	25,000,000		$ 175,000,000
Expansion borrowing capacity	75,000,000
Outstanding borrowings		$ 0		$ 0
Bridge Loan
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000

XML

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards issued to date (in shares)	3,796,496
Awards forfeited to date (in shares)	768,409
Awards available for grant (in shares)	321,913
Share-based payment arrangement, expense	$ 0.8	$ (0.8)
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 4.3
Period for recognition (in years)	1 year 7 months 6 days
Phantom share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
Unrecognized compensation expense	$ 1.9
Period for recognition (in years)	2 years 9 months 18 days
Share-based payment arrangement, expense	$ 0.8	$ (0.8)
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 4.9
Period for recognition (in years)	2 years 1 month 6 days
Restricted stock units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Restricted stock units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
Executive Officer | Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Executive Officer | Performance stock units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	0.00%
Executive Officer | Performance stock units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	200.00%

XML

Stock-Based Compensation - Summary of Information Related to Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit related to stock-based compensation included in net income	$ 715	$ 790
Share-based payment arrangement, expense	800	(800)
Phantom share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	800	(800)
Labor and Related Expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Salaries and benefits	$ 2,597	$ 2,904

XML

Stock-Based Compensation - Restricted, Performance, and Phantom Stock Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Restricted stock units
Number of Units
Beginning balance (in shares)	728,285
Granted (in shares)	0
Vested (in shares)	(171,420)
Forfeited (in shares)	(9,777)
Ending balance (in shares)	547,088
Weighted- Average Grant-Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 31.97
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	33.07
Forfeited (in dollars per share) | $ / shares	29.55
Ending balance (in dollars per share) | $ / shares	$ 31.67
Performance stock units
Number of Units
Beginning balance (in shares)	260,452
Granted (in shares)	26,660
Vested (in shares)	(124,743)
Forfeited (in shares)	0
Ending balance (in shares)	162,369
Weighted- Average Grant-Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 40.02
Granted (in dollars per share) | $ / shares	33.27
Vested (in dollars per share) | $ / shares	31.51
Forfeited (in dollars per share) | $ / shares	0
Ending balance (in dollars per share) | $ / shares	$ 45.46
Phantom share units
Number of Units
Beginning balance (in shares)	321,155
Granted (in shares)	0
Vested (in shares)	0
Forfeited (in shares)	(9,775)
Ending balance (in shares)	311,380

XML

Restructuring - Narrative (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 0
Restructuring accrual, deferred compensation program elimination		$ 3,400,000

XML

Restructuring - Restructuring Accrual (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Restructuring Reserve [Roll Forward]
Non-cash write-offs		$ (3,400)
Employee Related
Restructuring Reserve [Roll Forward]
Accrual balance at December 31, 2022	$ 3,422
Cash payments	(3,516)
Non-cash write-offs	0
Exchange rate fluctuations	94
Accrual balance at March 31, 2023	$ 0	$ 3,422

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income before income taxes	$ 22,829	$ 27,871
Provision for income taxes	$ 7,243	$ 9,404
Effective income tax rate reconciliation, percent	31.70%	33.70%

XML

Changes in Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 410,646
Other comprehensive income before reclassification, net of tax	443
Ending balance	421,112
Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(41)
Other comprehensive income before reclassification, net of tax	41
Ending balance	0
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(4,163)
Other comprehensive income before reclassification, net of tax	402
Ending balance	(3,761)
Pension
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	15
Other comprehensive income before reclassification, net of tax	0
Ending balance	15
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(4,189)
Ending balance	$ (3,746)

XML

Segment Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) operatingSegment	Mar. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | operatingSegment	5
Revenues [Abstract]
Revenue before reimbursements (net revenue)	$ 239,317	$ 283,861
Reimbursements	2,802	1,676
Total revenue	242,119	285,537
Operating Income (Loss) [Abstract]
Operating income (loss)	17,771	30,232
Research and Development	(5,528)	(4,402)
Operating Segments
Operating Income (Loss) [Abstract]
Operating income (loss)	36,213	47,642
Operating Segments | Executive Search
Revenues [Abstract]
Revenue before reimbursements (net revenue)	190,487	242,549
Operating Income (Loss) [Abstract]
Operating income (loss)	43,693	50,308
Operating Segments | Executive Search | Americas
Revenues [Abstract]
Revenue before reimbursements (net revenue)	127,327	162,553
Operating Income (Loss) [Abstract]
Operating income (loss)	38,699	39,851
Operating Segments | Executive Search | Europe
Revenues [Abstract]
Revenue before reimbursements (net revenue)	38,931	49,745
Operating Income (Loss) [Abstract]
Operating income (loss)	1,712	5,403
Operating Segments | Executive Search | Asia Pacific
Revenues [Abstract]
Revenue before reimbursements (net revenue)	24,229	30,251
Operating Income (Loss) [Abstract]
Operating income (loss)	3,282	5,054
Operating Segments | Heidrick Consulting
Revenues [Abstract]
Revenue before reimbursements (net revenue)	17,713	17,931
Operating Income (Loss) [Abstract]
Operating income (loss)	(3,116)	(2,084)
Operating Segments | On-Demand Talent
Revenues [Abstract]
Revenue before reimbursements (net revenue)	31,117	23,381
Operating Income (Loss) [Abstract]
Operating income (loss)	(4,364)	(582)
Global Operations Support
Operating Income (Loss) [Abstract]
Operating income (loss)	$ (12,914)	$ (13,008)

XML

Guarantees (Details) $ in Millions	Mar. 31, 2023 USD ($)
Guarantees and Product Warranties [Abstract]
Guarantor obligations, maximum exposure, undiscounted	$ 4.6

XML

Subsequent Event (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 24, 2023	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2023
Subsequent Event [Line Items]
Payments to acquire businesses, gross		$ 29,907	$ 0
BusinessFourZero | Subsequent Event
Subsequent Event [Line Items]
Payments to acquire businesses, gross	$ 9,500
Minimum | BusinessFourZero | Forecast | Subsequent Event
Subsequent Event [Line Items]
Payments to acquire businesses, gross				$ 4,000
Maximum | BusinessFourZero | Forecast | Subsequent Event
Subsequent Event [Line Items]
Payments to acquire businesses, gross				$ 8,000