What Everybody Ought to Know About Head Hunters

According to common definition a head hunter (or recruiter in some parts of the world) is “a person who searches for suitable candidates to fill a business position“. What does that mean? In short, a head hunter takes on the extended role of a hiring manager to do the initial scouting and filtering for possible candidates that can fill a job vacancy. This means that the hiring manager can ultimately focus on quality candidates rather than quality candidates given the burden alleviation of sourcing.

Key understanding:

A head hunter works for a hiring company manager. They pay the head hunter for services rendered.

A head hunter does not work for a job seeker. Good head hunters will have job seeker objectives in mind but their loyalty rests with the paying party.

It is a misconception to think that head hunters only target candidates that are not currently job active. This may have been the style of past days but not any longer.

Head hunters may work with candidate lists specifically given by the hiring manager.

Job seekers should never pay anything to a head hunter

Why are head hunters popular?

Because they take on the usually tedious role of sourcing and short listing relevant candidates. This will include advertising for open vacancies, scanning through submitted job applications, doing back ground checks of job seekers, filtering of candidates in first round face to face interviews which also will includes expectations management on both sides etc. etc. Head hunters are increasingly popular as they become the extended resource of the hiring manager, the additional human resources staff that effort-shortens the hiring process.

Why are companies using head hunters?

One objective is to alleviate the aforementioned burden, another, however, and much more important one is the value proposition that the head hunter holds. Most, not all, are professional business operations that excel in following:

1. They are vertically focused. This means they are experts in few or many industries, all depending on company size. If you are in the shipping industry, as example, you can contract with head hunters who excel in finding strong business leaders with expertise in your industry. They can do this because on staff, they have partners or recruiters, often executives from within the shipping industry, who knows the shipping industry “inside out” and therefore can identify exactly with the value that a company seeks and through that allow for better scanning and filtering to find the better and more suitable candidates.

2. They have extended networks. Head hunters usually know a lot of people. They have a database of contacts, including resumes, that they can readily draw on for initial filtering. Medium sized head hunters typically can maintain records with resumes of several hundred thousand candidates who are either actively or passively searching for new opportunities. This gives head hunters a very strong edge over the in-house HR department who many not even keep any, or just a few records.

3. For competitive senior positions, cherry picking is often the case, meaning that a senior position in the e.g. Shipping industry of company A is filled by a relevant executive from competing company B. It would be difficult for company A to cherry pick from company B, both for practical but also for ethical reasons and leaving this to the head hunter to do, gives them a strong value advantage.

When are headhunters used?

Why head hunters are used is given above, the question of when is usually one easily answered trough following:

1. Mostly for filling senior positions. There are many head hunters focusing on a range of services across all verticals. Some excel in only placing very senior top executives whereas others focus on general management positions. Given the cost involved in contracting head hunters, they are mostly used for the placement of management rather than general staff.

In highly competitive markets where skills and experience supply is low relative to demand

where specific and named candidates are targeted.

What is the usual process applied?

The normal modus operandi is as follows:

Companies contract headhunters for specific tasks. Some larger corporations have long standing open relationships with headhunters who work for them on a routine, on-going basis (this is also known as retained head hunting, but this is not the norm or very common. Mostly, head hunters will work on contingency basis i.e. on a specific assignment.

The hiring manager, usually a business executive supported by human resources, meets with the headhunter to establish scope of services and objectives in terms of outcome. A contract is made upon which the headhunter acts.

Following the process mentioned, the head hunter will provide an executive summary of shortlisted candidates, including their recommendations for a few key candidates to proceed with in the hiring process. The hiring manager will review and discuss this summary with the head hunter and consensus on next steps is then made.

Assuming that a candidate is found and hired the job of the head hunter is completed and payment is made by the hiring company. The head hunters fee is typically a % of the new hires first annual salary. It is not uncommon that professional head hunters charge above 20% of placement fees to hiring companies.