I’ve asked this question of many recruiters who wanted to make the career move to join my old headhunting firms, and a lot didn’t really know. Headhunting seems to have this allure to recruiters, hence me writing this blog. The more informed recruiters saw the huge increase in size of fees, retainers and staged payments, and a solid pipeline as the way to bigger billings. Some wanted to work on more senior roles and saw this as the route. Others were sick of the ‘who gets the CV in first’ race as their reason. And the last group liked the idea of delivering real quality on service, giving the client the very best the market has to offer and being truly valued by the client (I preferred this group!)
All these reasons are good reasons, but why I liked the last one the best was because the recruiters that gave me that answer were motivated by the reason that gives you the best chance of making it as a Headhunter – quality! In my forthcoming blog How To Deliver Quality Headhunts That WILL Win More Business, I explain how and why delivering a first class Headhunt will give you ongoing repeat business. But back onto the second question of…..what actually is a Headhunter?
To simplify this question there are loosely three types:
I did say three types of Headhunter and I’m going to slightly contradict myself now. To simplify things, there are loosely three types of business winning Headhunters. How to sell search is a blog in its own right and you can catch my podcast on the subject here.
I personally went down the first route, gaining respect and elevating my name in the industry. I did this so well that I was given a £5,000 a month retainer from one client just to ensure they kept my services for when they needed me.
This route then allowed me to move to the second type where I only won the Headhunt assignments and then asked a trusted recruiter help me fill them. Lastly, I did a bit of the third; but by that point I was ‘working on my business’ rather than in it. I still took the calls, not losing sight of the value to the firm my profile had, and then handing the whole assignment over while remaining in the background for the client should they need a reassuring word, lunch or a night out!
This is often the person that actually conducts the Headhunting assignment itself, so I personally see this role as a Headhunter too. Rather than getting mixed up with job titles, this role has a major say in the client feeling real value in the work we do and coming back for more, by delivering a comprehensive, and highly skilled industry search. How far the Resourcer goes in the search will depend on the recruitment agency. Some stop at the point they’ve mapped out the market for names then hand it back, some will then go on to make initial approaches to gauge interest, and some make the approaches and even do the face to face interviews.
A good Resourcer will also provide the Headhunt collateral e.g. a competitor’s organisational structure (hugely valuable when selling to a client,) a well presented search report and generating their colleagues’ interview notes, which is of real value to the client.
A good Resourcer will collect sales leads as they undertake the search. For example, if the Resourcer rings a target company and asks who is the Operations Director (or asks for the person by name if it’s already known) only to find out the position has no one currently in post, they will ask who the role reports to and hand this lead to the sales Headhunter. They will also go for the obvious ‘open net’ leads; the target candidate’s other applications, roles recently been for, roles the candidate is aware of that are open which they would be interested in, and positions within the candidate’s business.
There are of course the monetary rewards to Headhunting. Success only recruiters generally calculate fees at 15% to 20% dependent on sector, whereas Headhunting commands much higher rates plus the advantage of staged payments.
The percentage varies as it does in success only, however as a guide the entry level rate is 25% with some top level city firms charging 50%. Those at the most senior levels don’t restrict the remuneration calculation to basic salary and car allowance they often go as far as ‘all taxable emoluments’, in other words including anything the tax man would see as a benefit, e.g. Pension, Private Health, and Gym Membership. Some even bill on projected or on target commissions or bonus, rather than it having to be guaranteed income alone. So multiply the higher percentages with the broader definition of remuneration, and then throw Headhunting in generally on higher salaried roles and your fees can double, treble or more!
On how the fees are billed, the traditional model is a third on assignment go ahead, the second third on presentation of the shortlisted candidates, with the final fee based on the percentage of the successful candidate’s actual salary/ package minus the first two payments.
One last big win is with most recruitment agency Headhunter terms, the client has to pay the full fee regardless of whether they hire a candidate as a result of the Headhunt, which sounds unbelievable to a success only recruiter, but it truly is common practice.
I do stress that it’s not easy money and my forthcoming blog series on what’s involved in a first class Headhunt does explain how much more is involved. But there is no denying the fees are much, much higher.
As you’ll have read why so many recruiters want to make the move to Headhunting, there are plenty of reasons for you to consider it too. My blog does also explain the differing roles and styles you can aim for if you want to make your first step into this exciting sector.
This is the first blog in a series on Headhunting, a recruitment subject close to my heart. I successfully built two well-respected Headhunting firms; Executive Headhunters and Elliot Marsh, before I sold to concentrate on setting up and supporting recruiters in business through Davidson Gray. However this passion for Headhunting is still with me, which I hope shows in my blogs on the subject. I also feed this passion through to some of the businesses I’ve set up through Davidson Gray who now win regular retained work.