CLOSE-UP: LIVE ISSUE - Can the headhunting market handle many more entrants?

The Garden's founders are confident they have found a niche, John Tylee writes.

Despite their love-hate relationship, agencies and the headhunting companies they employ have more in common than meets the eye.

Both operate in sectors that are heavily over-supplied with little to distinguish between much of what's on offer. Yet there always seems to be room for a new player. Especially one that's sensitive to the demands of the market.

Not that everybody is predicting a dream debut for The Garden, the headhunting company being launched by the former DDB London senior managers Alison Parker and Mark Rapley. Their operation pledges to supply agencies with talent that's passionate about creativity, whether producers of ads or account staff and planners.

Gary Stolkin, one of the industry's most high-profile headhunters, believes there's always room for a newcomer that knows how to add value and deliver it.

Others take a more cynical view. "What's new?" a seasoned talent-spotter asks. "We already do what The Garden is offering. When you have worked in agencies for many years, it's easy to deceive yourself that headhunting is a doddle."

Parker insists that the fact she and Rapley have worked in agencies for so long is one of their greatest advantages. Having worked "close to the coalface", they believe they'll have no trouble translating existing long relationships from their agency careers into a new area of activity.

Parker's complaints - which she describes as "an overall culture of sloppiness" - will strike a chord with many top agency managers.

Too many headhunters still fail to understand the agency's brief and send candidates whose unsuitability for the job is obvious within the first five minutes of an interview, she says. Appointments aren't kept, there's confusion over salary levels and not enough attention to detail.

"We're going to remain small and work with a select number of agencies we'll get to know really well," Parker promises. "We'll be picky about who we represent and only place those people we'd be happy to hire ourselves."

Trust resulting from relationships built up over many years is key to any headhunter's success and reputation. Liz Harold, the creative specialist, regularly takes briefs from creative directors to whom she gave their first break in the business. Nevertheless, the fact that The Garden should be trying to muscle in on an already saturated market is being seen as a symptom of better times ahead.

Recession-battered agencies, which had previously put a freeze on recruitment, are starting to hire again. Stolkin claims to have 150 briefs for creatives, planners and account handlers from UK agencies and a further 50 for shops in other countries. "The market has become quite busy," he says.

"The past two years have been the worst I've ever experienced," Jan McGregor, one of the industry's longest-serving headhunters, says. "But there's been a definite upswing in activity since December."

The revival is being put down partly to the more bullish predictions of the WPP chief executive, Sir Martin Sorrell, the realisation among agency chiefs that the cuts have gone too deep, and a significant upturn in the US economy.

Headhunters working at the top end of the market seem to have felt the revival ahead of anybody else. Isabel Bird, the founder of Bird & Co, which carries out executive searches globally at the most senior level, is confident the corner has been turned: "We've been feeling the pinch along with everybody else. But now clients are telling us that business in Europe, the Middle East and Africa and Asia-Pacific regions is picking up and they can hardly wait for fresh talent."

Gay Haines, the worldwide chief executive of Kendall Tarrant, the industry's biggest player, agrees headhunters' fortunes have improved since the grim days of 2001.

At the same time, headhunters are seeing a change of emphasis in their work as a result of the growing globalisation of the communications business.

"This means network offices in the UK are handling higher percentages of global as opposed to local business," one says.

Some headhunters stand accused of over-use of the "scattergun" approach to stimulate business. Shaun McIlrath, Heresy's creative director, says: "I'm constantly cold-called by headhunters I've never heard of while books are shoved at me willy nilly."

The most reputable headhunters abhor such cowboy practices. "You can't build up a proper relationship with a creative director if you keep sending him crap through the door," Harold says.

A question now facing headhunters is how to sustain their income stream from agencies trying to save the 15-20 per cent commission on a successful candidate's first year's salary to the headhunter who introduced them.

M&C Saatchi estimates at least half the people it interviews for senior jobs come via the industry grapevine rather than headhunters.

One response has been for headhunters to extend their work into "talent management", whereby they will try to match an agency's talent requirements with what's available in the market.

Whether this will be enough to overcome the ambivalence agencies feel towards headhunters is an open question. Their feeling that headhunters make their money through destabilisation rankles.

"We've an in-built resentment of headhunters," Moray MacLennan, the M&C Saatchi joint chief executive, says. "You wonder if they're necessary but you feel you have to use them in case you miss out on the people you need."

Headhunters are resentful of any suggestion that they have parasitic tendencies. "Talent will always be rare and that's why we're employed to find it," one says. Another is more forthright: "If agencies could do this job themselves, they wouldn't be paying us."

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