What Is Headhunting?
Headhunting (also known as Executive Search) is the process of recruiting individuals to fill senior positions in organisations.
This style of recruiting may be undertaken by an organisation's board of directors, or HR executives, or by external executive recruitment representatives known as headhunters.
What's the Difference Between Recruiters and Headhunters?
If you are approached by headhunters, you are in the enviable position of being pre-selected for a certain role. Recruiters work slightly differently.
Here are some of the key differences:
- Recruiters advertise jobs and wait to be contacted by potential candidates, or approach a wide network of potential candidates. Headhunters approach a select few candidates, and only the ones that fit the brief.
- Recruiters typically serve both candidates and clients fairly, while a headhunter is only interested in fulfilling their client's brief.
- Recruiters actively try to match their existing pool of candidates to the vacant roles, sometimes regardless of sector or specific talent requirements. Headhunters would instead focus on the role first and then scout for the right candidate for their client.
- In the headhunting industry, specific industry knowledge of a client's target market is far more important than in traditional recruitment. As such, headhunters are much more likely to specialise in one industry sector or sub-sector.
Both recruiters and headhunters can be successful in matching candidates to jobs. Employers need to choose the best method for recruiting based on the desired result.
If an employer has a hard-to-fill vacancy at a high level, or their ideal candidate is currently employed by someone else and may not actively be looking for a change, hiring a headhunter might be the best option.
What Makes a Good Headhunter?
Many companies choose to enhance their pool of executive talent by using a headhunter's expertise.
What are the qualities of a good headhunter?
- Deep understanding of individual industries and job specs;
- The ability to spot emerging talent;
- Good at analysing job profiles and identifying skills in others;
- Great people skills;
- Passion, drive and persistence.
By virtue of their aggressive networking and people skills, headhunters today have created a niche for themselves and are frequently sought after.
A good headhunter will be friendly and approachable; they will already be up to speed on what makes a candidate perfect for the role.
If they appear pushy or unprepared when making contact with you, then this could be a red flag.
Contingency or Retained Recruitment: Which Is Better?
A headhunter is usually retained by a company to fill certain roles. But they can also work independently on a contingency basis.
An employer will often choose the type of recruiter that is most suitable based on the calibre of candidate they are looking for.
Contingency firms may seem the cheaper option initially, but they might not have access to high-quality candidates.
In contingency recruitment, the recruiter does not receive their fee unless they succeed in placing a hire for the advertised vacancy.
This might not sound like a great deal for the recruiter, but if you consider that a contingency recruitment fee can be anything between 15–30% of a candidate’s salary, it can certainly be a profitable enterprise.
Contingent recruitment, also known as non-exclusive recruitment, can also mean that the headhunter is competing with other agencies or even the client themselves, if they have also advertised the role.
Contingency recruiters have a reputation of sometimes being undiscerning when selecting candidates for consideration.
That’s because the recruiter is under pressure to send the candidates they have quicker than their competitors in order to earn their fee.
It is more common for professional headhunters to work on a retained basis. Indeed, many contingency firms have also begun to receive retainers.
Retained headhunting firms are paid a retainer fee up front to start the recruiting process, another part of the fee halfway through proceedings, and the balance when the candidate begins working in their new role.
Headhunters working on a retained basis get paid for the work they put in, not just for the end result they achieve.
And because they have the time to do things properly, they can tap into passive networks as well as searching through their active candidate database.
Passive candidates are those not currently looking for a job; headhunters often approach them directly via social networks. Though not actively looking, they may be open to considering the new role, if the headhunter can persuade them.
This can be hard work, but it can also produce some unexpected results.
Types of Retained Headhunting Firms
Headhunting firms can be large, global organisations but there are many regional boutique firms too.
Smaller firms can sometimes act together as a network, thus gaining global reach and being able to compete with the larger ones.
Some firms specialise in specific industries like retail, finance or IT. Others select and provide candidates only for specific roles, and some are a combination of all.
Global Firms – These cover a lot of ground geographically. They are also versatile in catering to a lot of sectors, from services to media, as well as other industries.
Because they move in such wide circles, they are likely to have access to premium candidates, which means they can find excellent candidates even across sectors.
Global headhunting firms will have many offices all over the world, and the consultants will typically be experts in certain sectors.
Boutique Firms – These tend to be more sector-specific and they normally look for candidates for senior positions. Usually, these are roles in corporate banking, corporate finance and similar niche markets.
These firms tend to have one or more offices in the major financial centres across the world.
Executive Headhunting: How It Works
Executive headhunting is an extremely lucrative industry; hence it's competitive to work in this sector.
Typically, the approach to recruitment within this sector is broken down into three functions:
- Business development
Although each person working within an executive headhunting team is needed for its success, generally speaking, the business development person receives the largest commission, while the researcher receives the smallest.
Potential job candidates are selected, scrutinised for quality and put forward to the client by the headhunting firm based on a meticulous study of the job description and job specification, which would have been developed in conjunction with the client.
It is common for potential candidates to be contacted directly by phone, often as a result of a recommendation from someone inside the existing network.
Headhunting firms are focused on identifying quality candidates and work hard to continually update their list of contacts so, when required, they will be ready to start recruiting immediately.
Talented candidates are also discovered through intense research. This might mean identifying and then contacting targeted people in specific companies who appear to fit the job profile in some logical manner.
They will also use social media, such as LinkedIn, to identify candidates that have been successful in their field.
Sometimes headhunters hear about potential candidates via referrals. Some of the best candidate referrals can come from individuals who would be ideal for the job themselves, but are not interested in applying themselves.
If you have strong skills and achievements in your industry, be aware that you might be approached. Update your LinkedIn account and making it as enticing as possible.
It's also a good idea to prepare some answers to career question,s and have a strong CV ready.
If a headhunter contacts you, it means they have confidence that you are a good fit for the role. Make sure you can live up to expectations, but don't forget you are also in a good position to negotiate a good deal.