Global recruitment firm Antal International is returning to the Russian market and is expected to soon announce the acquisition of a local player as the country emerges from recession and a revival in commodity prices boosts employment, bne IntelliNews can reveal.

Tony Goodwin, chief executive of Antal, which operates from 143 offices in 32 countries globally, in May told bne IntelliNews that he was in talks about buying a major local operator and was near to completing a deal.  

“The market has been in the doldrums for three years and I think the timing is right,” Goodwin said in an interview. “If we leave it till next year, my feeling is that Russia will have already recovered. There is still some pick-up needed but now is the right time to go back, especially as oil prices are improving and general sentiment is up.”

Nick Rees, former Russia country head at SThree Plc, is believed to be in the frame to lead the business. The initial team is expected to number 40-50 executive recruiters and could be doubled as the economy grows.

Goodwin left the Russian market after his selling his business in 2008 before the global crisis for several “tens of millions of dollars” to FiveTenGroup, a firm backed by private equity group Englefield Capital. The non-compete with Antal Russia, which is still run under the same name by some of Goodwin’s former colleagues, expired a number of years ago.

Goodwin also offloaded his Polish business in 2013, but has been in an expansionary mode ever since. After the Polish deal, Antal opened new offices in Czech Republic and Slovakia. A Mexico operation was opened in 2013 covering the Central America region and Antal acquired Smart Moves in the UK in 2015 to expand its coverage of blue-chips. Most recently, he joined forces with Career International to expand on Antal’s already successful China business.  

Antal is hoping to capitalise as several of its competitors have closed down or exited the market since the economy started contracting three years ago.

UK recruitment firm Michael Page closed its office in Moscow at the end of May 2015 after US and European sanctions – imposed after the Kremlin’s annexation of Crimea in 2014 – compounded the decline in commodity prices.

Other global and Russian search firms retrenched as foreign and domestic companies slashed headcounts. German lender Deutsche Bank closed their entire investment banking operations in the wake of a trading scandal, while investment banking rivals took the axe to hundreds of sales, trading and research staff. International energy companies were particularly hard hit by sanctions. Oilfield services giant Schlumberger axed all its expatriate staff as exploration and drilling activities almost ground to a halt.

Goodwin said the Western sanctions had ironically helped some other sectors to stimulate productivity. “Russian manufacturing has benefited from the sanctions,” he said. “I am not saying they are suddenly going to produce a Proctor & Gamble or a Unilever, but there is an increase in ingenuity, productivity and a need to get things done.”

Goodwin, who has visited Moscow three times this year, has been looking at a number of targets, including staffing and training firms. He hopes to be able to cross-refer existing clients in China and India into the Russia market space as President Vladimir Putin’s much-vaunted “pivot to Asia” gathers pace.

Goodwin said his partner in China, Career International, successfully completed a IPO on June 8 after becoming the largest “Chinese human capital company”.

Several of Antal’s leading Asian clients, including tech giants such as Alibaba and Tencent, are already making inroads in Russia in terms of e-commerce sales.

The number one focus for the business will be still be energy, according to Goodwin. He noted how commodities giant Glencore, a former Antal client, had renewed its investment activity in Russia this year. “Without doubt, we will see the Exxons, the Baker & McKenzies and the Schlumbergers renew their interest in the Russian market... That can’t not be in Russia because we won’t be able to wean ourselves off carbon fuels for a least another 20 years.”

Antal’s first major clients included Mikhail Khodorkovsky’s now defunct oil company Yukos, which was “quick to seek out the best managers and needed to use recruiters” as it sought to transform its corporate culture.

Goodwin, who hails from Stoke-on-Trent in northern England, started out in emerging markets in 1993 when he spotted the potential for new professional employment markets in the former Warsaw Pact countries and set up his own business named Antal – the Hungarian word for ‘Anthony’.

Since then, Goodwin and his team have developed businesses in emerging markets across the globe, such as Russia, India and China, through a mix of wholly-owned operations, franchises and joint ventures.

As for naming the new Russian business, Goodwin said he is unsure whether the existing license for the Antal brand in Moscow had expired.

Despite the uptick in Russia’s economy, Goodwin said it is premature to think the country can return to the boom times of the mid-2000s when 6% growth was the norm. “I am not saying we are going to see a massive uptick and everyone is starting to party,” he said. “But from an entrepreneurial point of view, some areas are about to pick up so my intention is to make an acquisition in the staffing space to exploit that.”