Opinion: Perspective - Stolkin/Kendall Tarrant deal is a mixed blessing

Being an employee of either Kendall Tarrant or Stolkin + Partners is probably going to feel a little weird over the next couple of months.

The two headhunters have been deadly rivals for the past few years yet now, with a merger on the near horizon, are set to become the best of friends.

The two companies occupy different positions in the market. Kendall Tarrant's historical dominance and international scale mean it will appear on most chief executives' speed dials. Stolkin, meanwhile, has been careful to position itself as the caring David, a hard-working alternative to Kendall Tarrant's Goliath.

Stolkin + Partners call themselves talent managers, not headhunters.

Such semantics may make the more cynical among us cringe, but at least the moniker reveals an ability to identify what is important for Stolkin's clients. This is something that has seen the challenger brand grow to its current position, one that is widely expected to see its people dominate Kendall Tarrant going forward.

More importantly, Stolkin will add the all-important next generation of agency heads to Kendall Tarrant's client list. Gary Stolkin, and his associate Lucy Meredith, have worked very hard over the past five years to build working relationships with heads of account management, creatives and managing directors. It's a people business and Stolkin is well-liked and trusted by his clients, in much the same way as Gay Haines at Kendall Tarrant is by hers.

Headhunting is also a generational business. While many of the agency chiefs currently in jobs were put there by Haines, her ties to agency staff lower down the pecking order are more limited. As the people with whom she has built the strongest of relationships begin to retire or move out of the business, her influence will start to wane.

This won't happen overnight. Haines still has a lot of influence in the UK and abroad - recent activity has seen her put Tim Lindsay into Publicis, Ben Langdon into Euro RSCG and Garry Lace into Lowe. There is no doubt that she still generates a sizeable quota of Kendall Tarrant's income.

The agency chiefs in her coterie are incredibly loyal to her and will wish to remain close to her until they retire. So entrenched is Haines in senior advertising agency culture that the notion of her not occupying a regular lunchtime table at The Ivy would be an unsettling break with the past for many in the industry.

Nevertheless, the Stolkin/Kendall Tarrant deal is a very logical one for both parties. Stolkin makes some money and gains the global reach his company lacked, while Kendall Tarrant secures next-generation contacts and swallows up the greatest threat to its dominance. However, the merged entity is expected to account for about 85 per cent of the advertising headhunting market, so the acquisition might not be such good news for its agency clients. It is unlikely the new company will be able to resist raising its prices. After all, it is part of a publicly quoted company (Hat Pin) and, therefore, is under constant pressure to maximise its annual profits.

This, of course, will help to create the space for a new challenger in the market. The remaining 15 per cent of business is shared by several small operations and it's anyone's game. The Garden, which recently put Alison Burns into JWT's vacant chief executive's chair, gets a good review.

But there's a second threat to the merged giant's long-term dominance and that is agencies' ever-increasing inclination not to use headhunters.

With constant pressure on margins, agency chiefs no longer instinctively reach for the phone to brief a headhunter when they need to hire staff.

The best people's reputations precede them. Savvy agency heads keep abreast of up-and-coming talent and approach individuals directly, saving both time and money.

- Claire Beale is on maternity leave.

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