What Is A Headhunter And How Does Headhunting Work?

Many companies are looking for new employees. Whether you're seeking new talent for mid-level or high-level positions, you may be considering using a headhunter or recruiter to fill the open role.

But before deciding to work with either one, it's important to understand the differences between them, as your recruiting decision can help your company gain or lose a competitive edge.

To help you make an informed decision, we created a guide to list the difference between a headhunter and a recruiter.

What is a headhunter?

A headhunter is a company or a professional offering employment recruiting services on behalf of the hiring company. Headhunters, also called executive recruiters, are hired by companies and organizations to locate suitable candidates who meet specific job requirements. This function is called executive search.

In most cases, companies enlist the help of headhunters when there is a sense of urgency to fill open positions and their human resources team is unable to find the best possible candidates on their own.

What is a recruiter?

A corporate recruiter is a professional responsible for finding potential candidates to fill a variety of open roles. Often, recruiters find candidates at job fairs or through online job postings. In some cases, they also leverage their network to find potential employees.

Recruiters may work for a recruiting agency or within a company's human resources department, filling open positions specifically for that company.

Differences between headhunters and recruiters

Headhunters and recruiters are both responsible for finding the top talent to fill an open role. Headhunters sometimes work with recruiters to fill positions. But while they share similar job roles, there are key differences when it comes to their processes and the positions they fill.

Headhunters

Employers often hire headhunters for hard-to-fill, top-level positions such as C-suite roles or jobs unique to the company or the industry. Here's how headhunting differs from recruiting.

• Sourcing Candidates. When searching for potential candidates, headhunters often leverage their network of connections or seek referrals from other high-level employees in the company.
• Roles Filled. In most cases, executive recruiters are hired to fill senior-level, executive-level, and C-level roles.
• Method. Headhunters use proactive methods to find candidates for the role. This is partly because headhunters also approach passive candidates who are not actively seeking a new role but may be a perfect fit for the position. These methods include leveraging professional connections and conducting close studies of competitors to identify leads.
• Cost. Hiring headhunters to fill open roles usually costs more as they have to take additional measures to identify both active and passive candidates.

Recruiters

Recruiting is a common practice for identifying potential candidates. But unlike headhunters, recruiters mostly focus on filling entry-level to mid-level roles. Here are other ways recruiters are different from headhunters.

• Sourcing Candidates. Unlike headhunters, recruiters only work with candidates who are actively looking for a new position. Recruiters often generate leads through online job boards and career fairs.
• Roles Filled. In most cases, recruiters are only used to fill entry-level and mid-level roles. However, some companies employ recruiters to fill executive-level positions.
• Method. When searching for potential candidates, recruiters use traditional methods such as posting job listings on job boards and gathering resumes from interested candidates for review.
• Cost. Recruiting is almost always a less expensive endeavor than headhunting, mostly because recruiters are only seeking active applicants.

In addition to those outlined above, there are also significant differences in the ways headhunters and recruiters work.

The Headhunting Process

When working with headhunters, companies are given the power to manage the specifics of their headhunting procedure. But in most cases, headhunters follow a set process:

• Determine the position to be filled. Usually, the CEO of the hiring company or members of its board and leadership team will approach the headhunting team about the need for a new employee. At times, headhunters would need to be discreet during the search process.
• Determine the role requirements. Each role comes with its own set of hiring requirements. Before the search begins, headhunters spend time working with other members of the staff and executive team to identify the necessary education, training, experience, skills, and personality for the hire.
• Identify all possible candidates. Headhunters begin the search process by looking for active job seekers interested in the position. But depending on the role, headhunters can also look at passive candidates who are not actively looking for a new role but may be persuaded to leave their current position for the right offer.
• Screen candidates. Once the headhunting team has a list of possible candidates, they'll work with the company's hiring team to review and screen all candidates with the goal of narrowing the field to only a few outstanding candidates.
• Interview process. After screening the candidates, the hiring team will conduct a series of interviews, some of which will also be attended by company stakeholders.
• Extend a job offer. After making a hiring decision, the company extends a job offer to their chosen candidate. In some cases, this also signals the end of the company's partnership with the headhunting firm. However, some companies retain headhunters to ensure the new employee is onboarded successfully.

The Recruiting Process

Recruiters often follow a structured process to find potential candidates for open roles. This is the most common procedure:

• Identify positions to be filled. Recruiters begin the hiring process by identifying the roles their company needs to be filled. Usually, recruiters are handed a list of open or new positions to fill.
• Create a job description. Recruiters are responsible for writing clear and comprehensive job descriptions with information on the job or jobs they are filling. Job descriptions often include several elements, such as job title, key responsibilities, necessary education and experience, and applicable skills.
• Source candidates. Most recruiters use online job boards as the primary resource for seeking potential candidates. Some recruiters may also attend job fairs and industry-specific conferences or review past applications for prospects.
• Interview. After creating a pool of candidates, recruiters interview the potential employees. In most cases, recruiters interview candidates a single time. A hiring decision is made after.
• Extend job offer. The company makes an employment offer to their chosen candidate.

How are headhunters compensated?

Headhunters are paid a fee to source and recruit candidates on behalf of their clients. Specific terms and conditions vary by job. However, all headhunters are given a partial payment upfront to initiate the search.

Unlike recruiters, who are often paid only after their candidate is hired, headhunters are often paid in three installments, each tied to a specific stage of recruitment. The amount to be paid in each stage will depend on the fee charged by the headhunter.

The fee is a percentage of the negotiated first-year salary for the role to be filled. This includes any sign-on bonuses. The average percentage fee for headhunting services is 20% to 25% of the first-year salary, but some firms charge as low as 15% and as high as 40% or more.

For instance, a headhunter requiring a 30% fee may structure their charges as follows:

• 10% upfront to initiate the executive search process
• 10% after compiling a shortlist of potential candidates
• 10% once a candidate begins employment

In some partnerships, the hiring company may require a candidate to work for at least three to six months before paying out the commission percentage to a headhunting firm.

Are you looking for a headhunter?

Keller Executive Search is a leading headhunting firm that supports companies and organizations of all sizes through stellar recruiting and placement services for high-level positions.

Contact us today to learn more about our executive search solutions!