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Headhunter

An individual or firm that works on behalf of an employer to help fill specific job roles and provide other recruiting services

What is a Headhunter?

A headhunter is a person or firm that works on behalf of an employer to help fill specific job roles and provide other recruiting services. They can work for an agency or as a freelancer.

To find people to fill the specific job roles, headhunters can either approach employees of other firms, often competitors of the employer looking for an employee, or create a pool of candidates from which they can choose the best one.

 

Headhunter

 

Furthermore, headhunters can also be referred to as executive recruiters. Their act of locating qualified candidates is called an executive search; however, there are differences between headhunters or executive recruiters and recruiters.

The main reason that employers tend to hire headhunters to find candidates to fill their specific job roles is because of a sense of urgency or because of the firm’s inability to locate an acceptable candidate. However, there are many other benefits to using headhunters.

 

Headhunter vs. Recruiter

A headhunter is a third-party firm or individual contracted by the company seeking to fill a specific job role. In contrast, a recruiter is directly a part of the firm seeking to fill a specific job role. A recruiter can be thought of as an in-house headhunter; a recruiter only seeks candidates for one company.

Additionally, when a headhunter introduces themselves to a potential candidate, they would typically introduce themselves as a representative of their recruiting agency. However, when a recruiter introduces themselves, they will typically identify themselves as an employee for the company looking to fill a specific job.

Furthermore, a recruiter’s main source of compensation is typically in the form of a fixed salary. On the other hand, a headhunter’s compensation is mainly commission-based and won’t be paid unless they fill the position the recruiting company is looking to fill.

 

Headhunter Compensation

As described above, a headhunter’s compensation is based on commission. The typical format of their compensation is a portion of the candidate’s first-year compensation. In other words, the compensation a headhunter receives is a percentage of the first-year salary of the candidate that they bring forward to the hiring company if that candidate is selected for the job.

The headhunter can earn anywhere up to 30% of the first-year salary for the candidate. However, it is important to note that the compensation is only received if the headhunter’s candidate is selected for the position; otherwise, they make nothing. It is why the compensation is commission in nature.

Furthermore, since the compensation is typically fully commission-based, it drives desirable incentive effects for firms seeking to fill their positions. An example of such incentive effects is the speed in acquiring a candidate and ensuring that candidates are strong and fit the role’s job specifications.

 

Benefits of Working with Headhunters

One benefit of working with a headhunter from the position of a candidate looking for a job is exposure to more job openings. A large percentage of the job market is hidden. Job openings may not be posted on company websites or job boards. However, headhunters may be able to access such “hidden” jobs and give a candidate the ability to apply to them. Also, it is not rare that certain companies exclusively use headhunters to recruit candidates and fill job roles.

Another benefit is that headhunters can help a candidate to prepare their resumes and cover letters. Since headhunters are very close to the hiring process and see the types of candidates who get selected, they have an excellent insight into the types of resumes and cover letters that grab the attention of hiring firms.

Also, due to the incentive effects that headhunters face, mostly because they get paid mainly by commission, they are invested in your success as a candidate. Headhunters benefit greatly if the candidate they are working with is selected for the position. Thus, they have an incentive to ensure their candidate is in the best possible position to earn the job.

 

Further Readings

CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:

  • Employee Background Check
  • Human Resource Management
  • Job Search & Recruiting Resources
  • Compensation Guides

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