By the end of November, more chief executives had lost their jobs or left them this year than during all of 2007, when 1,356 exited, according to the outplacement consultancy Challenger, Gray & Christmas.

That churn is very good for job recruiting firms, more popularly known as headhunters. Revenue for search firms worldwide was expected to grow by 8.7% in 2008 to $11.6 billion, according to the Association of Executive Search Consultants.

When it comes to finding chief executive officers, are headhunters worth all that money? The going rate to recruit a chief executive is typically a flat $1 million, which is about one-third of that CEO's first-year cash compensation. Do corporations get bang for those bucks in their stock price? Or do they do better when they perform the search themselves?

We measured the stock performance of 117 large companies that hired a chief executive during the past 10 years from outside their organization with the help of one the big four recruiters--Heidrick & Struggles, Korn/Ferry International, Russell Reynolds Associates and Spencer Stuart. We weighed them against the performance of 23 companies that did their own searches.

The upshot: Companies that hired a chief executive on their own fared better than companies that used headhunters. Corporate boards that trusted their own guts saw their company's stock realize a return 34% higher than the S&P 500 one year after their chief executive's date of hire (see table below). Only Korn/Ferry's searches matched that success over the same period. (We also measured other time periods, to prevent the data from being skewed by anomalies in company or stock market performance, or by news of a chief's departure.)

Yes, it's true. Investments can appreciate. Even as the S&P fell on Monday, the Forbes.com Investor Team happened on an asset allocation model that they hope yields double-digit returns over one and (annualized) over five years. No promises here, of course, but it is nice to hear investment strategists talk about growth again.

Dr. Bob Froehlich, chief investment strategist at DWS (Deutsche Bank's (nyse: DB - news - people ) retail unit) offered up his formula:

Nandan Nilekani is cochairman of Infosys Technologies (nasdaq: INFY - news - people ), India's second-biggest outsourcing firm. Its success is the basis of his $750 million fortune. We caught up with Nilekani at the Infosys headquarters in Bangalore, where he talked about the company he helped build, the outsourcing industry and his first book, Imagining India: Ideas for the New Century (Penguin), just released.

FORBES ASIA: Will economic conditions change things for Indian outsourcing?

Nilekani: There will be deep ramifications. In the short term outsourcing will slow down. Companies will go slow on making decisions, the environment will be challenging. This is a big one, but even this cannot last forever. The U.S. has an enormous capacity for reinventing itself. That is clear from the fact that Barack Obama has been elected President.

As part of his campaign, Obama spoke against offshoring. Will this affect policy in the coming months?

Barack Obama will do things that are right for his country. He understands that outsourcing firms are partners in making American companies stronger, more efficient and successful.

India's outsourcing industry grew from a few billion dollars to $40 billion in the last few years. What do you see happen in the next five?

It is unlikely that we will see the growth rates of previous years. Not 30% to 40%.

After years of high growth, outsourcing companies have started layoffs. How will workers cope?

Many young people who joined the industry four or five years ago have only seen the good times. It was growth on steroids. They could have been lulled into a feeling that this is normalcy. We have to do a lot of things that are hard. The economic crisis is useful because it forces all of us to focus on productivity.

Infosys spends a huge amount of money and resources on training fresh hires. Is this a sustainable business model during these recessionary times?

We set up our leadership institute in 2001 and our training infrastructure in 2002 during a downturn. We think of our training as a long-term strategic advantage.

Talking about reinvention, have you reinvented yourself?

I used to take on a lot of things, thrash around, lose control and have nothing to report at the end of the day. My new motto is to be generous with my money but stingy with my time. My scarce capital is time, not money. I'm turning down meetings, invitations to speak. I have dropped all commitments on foreign company boards. I have decided that the place I want to spend time is India. Not to sound arrogant, but I use my name to improve my productivity. If I am going to the airport, then I will travel to three cities, ask people to make time for me, pack 15 meetings into three days and come back. Infosys has first call on my time.

Your idea on the flat world ended up inspiring a bestselling book authored by Thomas Friedman. What is the bestselling idea in your own book?

It is not one idea. A democratic country like India with a billion individualistic people cannot move in a particular direction based on one idea. It calls for a bottom-up change.

Does middle-class India live inside a bubble, having very little to do with the rest of India, which is very poor?

India's middle class has abdicated. In its extreme form, many Indians have left the country. But abdication is also living in gated communities, running our own generators, digging bore wells for our homes, sending our children to private schools--in my own case, sending them to college in the U.S. The middle class has never put pressure on the system. They have simply dropped out.

Does writing come easy to you?

I used my experience in writing software to write the book. When you write a software program that is large and complicated, just as this book is, then you structure it well, divide it into individual modules, write each module to be self-contained and make sure there are clear interfaces. I wrote a book that spanned 18 ideas. I sliced these into sections and put a wrapper around each.

(Nandan Nilekani was FORBES ASIA's Businessman of the Year for 2006. See "Businessmen of the Year" for this year's winner.)