Whitehead Mann fights to regain reputation

Most of the firms escaped with an "average" or "above average" ranking. Only Whitehead Mann fell below par: the doyenne of British headhunting is considered across the industry to be "struggling".

Even then, it did not take a sixth sense to see that something was awry at the UK's biggest headhunting firm. Following an acquisitive spree that has seen it take over six firms in four years, Whitehead Mann's reputation has been damaged by a series of senior-level defections and managerial errors.

During the past two years, it has lost, among others, a chairman, a chief executive, founder Anna Mann, and a senior partner who had been with the company for more than 20 years. Last week the firm sacked its chief executive, Stephen Lawrence, after two years in the job. At the same time, Carol Leonard, who joined Whitehead Mann in the spring after the acquisition of her firm, has joined the main board.

Whitehead Mann been associated with two unsuccessful corporate hires: Sir Ian Prosser was rejected as putative chairman of J Sainsbury, the UK supermarket group, and Luc Vandevelde resigned from the same role at retailer Marks and Spencer. In July, Peter Bracken, former head of communications, was fined 15,000 for insider dealing in Whitehead Mann's shares.

The financial services division has not escaped unscathed. In 2001, it bought Baines Gwinner, the London-based finance specialist. Founder Jonathan Baines has stayed but Amy Russo and her colleagues Gale Kroeger and Vanessa Eertmans De Samamé have resigned. Whitehead Mann has also proved unsuccessful at retaining other financial services consultants: Manjit Wolstenholme, former co-head of investment banking at Dresdner Kleinwort Wasserstein, left in May after only four months.

Rhian-Anwen Hamill left in June to join the Rose Partnership, and Philip Marsden, deputy chief executive and head of the financial services practice, took a year off. Two weeks ago came some of the worst news: several of the company's US partners had resigned and revenues in the first half would be down by 12% compared with the previous year.

In an industry like headhunting, public problems are bad news. When a firm's main selling points are its network of contacts and ability to persuade people to change jobs, reputation is vital. This may explain why Whitehead Mann declined to comment.

To make matters worse, the company's problems are in contrast to the rest of the industry. The Association of Executive Recruiters forecasts global revenues for search firms will be up by 23% this year. Dee Symons, a consultant in the global banking practice of Russell Reynolds in London, said business was booming. She said: "We are having a record year in the financial services sector."

While Whitehead Mann has been licking its wounds, others are expanding. Heidrick & Struggles, Korn/Ferry, Sheffield Haworth, Alexander Mann and the Rose Partnership have all recruited financial services consultants this year. Isabelle Martin, head of the financial services division at Korn/Ferry in London, said she had hired two partners and two associates and plans to hire a further two before the year is out. She said: "The franchise is nearly the same size as the peak of the market in 2001."

Growth has encouraged some firms to set their sights overseas. Sheffield Haworth opened a US office in July. Tim Sheffield, founder and chief executive, declared it a big step towards becoming a global player.

However, the record of European headhunters in the US does not bode well. Whitehead Mann's American activities go back to 2000, when it acquired Pendleton James, a US executive search firm. Baines Gwinner also brought with it a New York office. But after the latest setback, it may decide to get out of the US altogether and ready to rely on alliances to cover American clients.

Whether Whitehead Mann can regain its former reputation in financial services headhunting is unclear. As recently as August, it was voted top UK financial services headhunter by Executive Grapevine, a publisher of headhunting news and industry rankings. But it has hard work ahead if it is to fight off expansionary rivals.