Close-Up: Live Issue - Is Stolkin deal bad for the industry?

How will the Kendall Tarrant and Stolkin + Partners merger affect recruitment?

Usually, there are only two reasons to think about recruitment consultants: when you're looking for a job or looking to fill a vacancy. But when adland's two highest-profile headhunters, Kendall Tarrant and Stolkin + Partners, merged last week in a £1.2 million deal, a spotlight was thrown on the business and what the deal would mean for the industry.

Undoubtedly, the most eyebrow-raising result of the deal was the behemoth it creates: the merged company controls about 85 per cent of creative agency recruitment. Can such a monopoly be viewed as anything other than a bad thing for the industry it serves?

That said, its share of other sectors is much smaller. It services only a third of the ever-growing interactive sector's recruitment and its share of media and public relations is much smaller.

One of the first issues to spring to mind is whether having a monopoly in the advertising jobs market will allow it to raise its prices. Gary Stolkin, the chief executive of the new company, insists Kendall Tarrant's commission fees will not be going up, although he may be forced to change that tune now that he runs a division of a publicly quoted company (Hat Pin).

The other major sticking point, raised in the letters page of last week's Campaign, is trust. With such a large share of the market, won't Kendall Tarrant inevitably be forced to take people out of agencies it is being paid to recruit for? As one advertising agency chief explains: "I think that is a problem. I won't deal with headhunters that are taking people out of agencies I've run. You're either for us, or against us."

Stolkin, who will work alongside Gay Haines, the new Kendall Tarrant worldwide chairman, concedes that the practice of poaching staff from clients is unavoidable: "I don't see another way of doing it. If you agree not to poach from someone, the proposition of a single talent hub collapses."

He also dismisses the argument that he would deliberately take a candidate out of a company just so that he can fill that vacancy. "I don't accept that headhunters persuade happy people to leave their jobs. Ultimately, retention has to be the responsibility of the client," he says.

There are benefits for the industry, though. With Kendall Tarrant's global footprint, there's a single point of access for agencies and candidates alike.

Of course, there are alternatives to Kendall Tarrant - smaller companies such as The Garden or The Mellor Partnership in the UK. The downside to using these companies is their comparatively limited reach, although this is offset to a certain extent by a more personalised research service.

Stolkin has built his business placing less senior candidates, heads of account managment, board directors and creatives, in their respective roles. Kendall Tarrant, meanwhile, has the top tier of agency placement sewn up. Bringing the two operators together will enable Kendall Tarrant to handle the placement of future generations of agency management.

Clearly the merger aims to offer Stolkin + Partners' quality of service with Kendall Tarrant's reach, but the trade-off is a headhunter that will inevitably poach staff from agencies it recruits for and may yet raise prices in the process.

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AGENCY CHIEF - Tim Lindsay, chairman, Publicis

"In an industry where trust, confidentiality and integrity are paramount, Kendall Tarrant has got to be careful its size doesn't lead it to compromise those values. I'm sure it won't.

"I also think it's a very smart deal, because Stolkin + Partners was the rising star and if anyone was going to get into Kendall Tarrant's space it was it.

"However, I don't believe it will be able to put its fees up. It is not in a monopolistic situation as there are still good alternatives in the market."

RECENT CANDIDATE - Tony Regan, communications planning director designate, The Red Brick Road

"It could be good for candidates. It's good to know you're signed up with an operation that can give you access to every agency, whether you're the kind of candidate that wants to register your interest in moving or one who is headhunted.

"Kendall Tarrant can cast the net wide. As a candidate you get the sense you'll be given good guidance because it's based on knowledge of nearly every agency you could go to.

"For someone who's being headhunted, which is a more precise operation and requires expert knowledge, that could also come from a company that has market domination."

RIVAL OPERATOR - Simon Mellor, managing director, The Mellor Partnership

"If you work on an ongoing basis with retained clients, there's an element of confidentiality in that relationship.

"If you work in a close partnership with your clients, they are entrusting you with a lot of information and knowledge that I personally feel ought to be respected. To then go and take their staff away isn't really being part of that partnership.

"If you've got 85 per cent of the market, there's an incentive to take people out of your client because you'll get asked to fill that gap."

KENDALL TARRANT - Gary Stolkin, chief executive, Kendall Tarrant

"If you have a very substantial share of the market, it's correct that you must be poaching from clients. The alternative is a small and niche business with a small number of clients you don't poach from. But then clients may have to work with a number of headhunters to make sure that they don't miss anyone.

"I don't accept that headhunters persuade happy people to leave their jobs. We talk to people on an ongoing basis, but they reach a point when they're interested in knowing what they could be doing elsewhere and that's when they go to a headhunter. I'd rather they came to see us because we give them good career advice and very often our people will say: 'You're better off staying where you are.'"


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