Headhunting – A guide to help you decide if it will benefit your business
We've explored what exactly a headhunter is and why you would consider one for your business
The recruitment industry is vast and there are a lot of different services on offer that, to be frank, all sound quite similar. The last statistic I heard was that there are as many restaurants in the UK as there are recruitment consultancies. Just like restaurants they all offer different products and services at different prices and some will delight and some will leave you underwhelmed.
During the last few years, it seems like most recruitment agencies describe themselves as “headhunters” or "executive search” specialists, which confuses businesses looking to retain a recruitment partner for the first time.
So, what exactly is a headhunter and why would you invest in one for your business?
What is a headhunter?
A headhunter is a recruitment specialist that you retain exclusively to help you recruit a specific role for your organisation. This could be a senior leadership role or a role for which there are not many candidates available in your industry. It could also be because of a geographical challenge to the role.
A headhunter is more of a management consultant than the average recruitment consultant that you are likely to have already met. What I mean by this is that you are investing in an expert who should do all the leg work instead of you. Headhunting is a robust and well thought through recruitment process and does nit rely on a candidate database.
At the outset of any project, headhunters are there to:
- Offer you advice
- Challenge your thinking on the role and person you need to recruit
- Suggest alternative options
- Know where to find candidates
- Advise you on the potential remuneration package needed
- Be your sounding board
They should be armed with industry statistics from previous assignments in your sector and help you define exactly what you want and what is possible before the recruitment project starts.
You are investing in a relationship which should allow an open and honest dialogue based on your headhunter’s industry and recruitment expertise. This should be a face to face relationship and definitely not a quick telephone call that transfers a job description for them to translate and introduce candidates for. Investing in a headhunter should feel the same as investing in a PWC or Deloitte management consultant and, unless you take this approach, it is unlikely that you will maximise your return on investment. Disengage your thoughts of a recruiter delivering a business transaction, filling a role quickly, sending you an invoice and then moving on to their next client. Your relationship with a headhunter should be a long-term one, not necessarily based on the volume of roles you need to recruit, and just like any partnership, it will get better the more you put into it.
The difference to other recruitment services
Through other recruitment services, the objective is to create a large pool of candidates by casting your net as wide as possible using all sorts of methods including advertising and CV database trawling. The hope here is that, by doing so, you will find the one individual you need to fill your vacancy. This is a bit like throwing mud at a wall and hoping some of it sticks.
In headhunting, we are not interested or focused on creating high activity and spuriously casting the net as wide as possible in the hope of hooking one candidate. Instead, headhunting is more research focused, investing time to really understand the client, your culture, business strategy, your role and ultimately the experience and behaviours of the candidate you want to recruit. This research-based approach hones down to target a very small group of individuals to engage with. Armed with this intelligence, your headhunter will use advanced research methods to identify the types of organisations and industries that potential candidates will be found in. It also uses their existing network to gain referrals and recommendations from.
The best potential talent for your business is unlikely to be proactively looking for a new role and so it is your headhunter’s responsibility to engage and entice them into an initial conversation that could lead to a more formal face-to-face meeting in which both parties will explore each other to qualify if your role and organisation is aligned to their experience, skills, behaviours and career goals.
You should have agreed a milestone based project plan at the outset and your headhunter should provide clear and regular progress updates against this to encourage you to help shape the candidate longlist. You should definitely not expect a long period of silence between your engagement meeting and the presentation of a candidate shortlist. Be involved.
Read our blog on the key differences between retained executive search and contingency recruitment agenices here.
Why do you need a headhunter?
Here are the main reasons that you may need to partner with a headhunter;
- Value for money
Many companies who call Collingwood start with asking “how much will it cost” even before they fully understand the services we deliver. If recruitment is all about cost for you, then you are best not to use a headhunter. You get what you pay for and usually cheap products and services don’t last long and so basing your decision on price could be a false economy.
Recruitment is all about getting it right first time and for the long term. Investing in a headhunter will undoubtedly maximise your ROI by minimising the risk of a poor hire and ensuring that you recruit someone who will reap rewards for you over the longer term.
That said, fees for using a headhunter are a lot closer to contingency database recruiters these days and you will certainly enjoy a lot more for your money.
- Talent is tough to find
Today’s growing economy and low unemployment mean that high calibre talent is even more difficult to find. It is likely that these candidates are not proactively looking for a job and so will need a proactive approach to engage and entice them into a discussion about your opportunity.
- You are looking to recruit high level, high salary roles
There are statistics suggesting that a failed appointment could cost around 3 times the candidate’s annual remuneration. So based on a £100,000 package, it could cost you £300,000 plus the set back of not having someone in the role if you get it wrong. Furthermore, it tends to unsettle employees when a senior hire goes wrong so you need to execute a robust strategy to minimise the risk of a poor hire and ensure you recruit right first time.
- You need to take a confidential approach to filling a “sensitive” vacancy
You may have a role that you don’t want your competitors to know is vacant or need to recruit as you are going to move the incumbent on due to promotion or out due to poor performance or a change of business strategy. Headhunting can be totally confidential.
- You want to understand your industry and competitors
Being research focused, your headhunter can provide you with all sorts of market intelligence. You just need to specify your needs.
Take a look at these 20 amazing benefits of a headhunting process here.
How much does a headhunter cost?
The common assumption is that headhunting is an expensive form of recruitment. As I said before, you get what you pay for and just watch out for the false economies of filling your vacancy cheaply. It could be a reduced cost now, but perhaps not for the future.
Broadly headhunters will charge you between 24% and 40% of annual remuneration. It is usually paid in 3 stages; Retainer Fee – payable at the outset of the project, Working Fee – payable when a candidate shortlist has been delivered to you and you are happy with it and Placement Fee – when a candidate accepts your offer.
How to choose the right headhunter
You are choosing a partner for your business and so you need to find someone that you trust, enjoy working with, enjoy talking to, someone who listens, challenges and has the expertise to add value and will ultimately successfully appoint your vacancy.
I would advise you to gain referrals and recommendations by speaking to their clients. Interrogate these referees on what it is like to work with them together with their strengths and weaknesses.
Interview them and don’t move forward until you are really sure. The one thing I ask is that you don’t simply go for the cheapest option!