What is a headhunter?

A headhunter is a recruiter an employer pays to find candidates for a specific role. The word describes a method more than a type of firm. A headhunter works out who could do the job, most of whom are employed and not applying anywhere, and contacts them directly to ask whether they would consider a move.

The employer pays. Candidates don't, and a reputable headhunter never asks them to.

Firms use the names loosely and they overlap. A rough guide:

Headhunter

The informal name for any recruiter who approaches people who aren't job hunting. It is used for individuals and firms alike.

Recruitment agency

A firm that fills permanent roles for employers, usually paid on contingency. Most mix job ads, their own candidate database and some direct approach. In the US, recruiting firm and recruiting agency mean the same thing.

Executive search firm

Headhunters for senior roles such as the C-suite, board seats, partners and heads of function. They are usually retained and exclusive, and run a researched search. See our executive search firm rankings.

Staffing agency

Supplies temporary or contract workers, often employing them and billing the client by the hour. It is a different business from permanent recruitment, though many large firms do both.

Our index covers firms that fill professional, white-collar roles, whatever they call themselves.

A good search starts with a map of the market, not a database query. For a typical role, the headhunter:

1. Agrees the brief with you: the role, the must-haves, the pay range and which companies are off limits.
2. Lists the companies and teams where suitable people work now, and the job titles they are likely to hold.
3. Finds named individuals through research, their own network, past candidates and referrals.
4. Approaches them by phone, email or message, outlines the role and finds out who is interested.
5. Screens the interested ones for skills, motivation and pay expectations.
6. Presents a shortlist with notes on each person, then manages interviews, the offer and the resignation.

Steps two to four are what separate headhunting from posting a job ad and sorting the applications. An agency that mostly advertises can be quick for roles with plenty of active job seekers. For scarce skills or senior roles, the direct approach is what you are paying for.

How a firm is paid shapes how it works on your role. There are three common models.

Contingency recruiting

The firm earns nothing unless you hire someone it introduced. You pay nothing upfront and can brief several agencies at once. The catch is in the incentives. A contingency recruiter works many roles at the same time and spends its hours where a fee looks likely. Hard roles get less attention, and the first CVs you see are often the people who were easiest to reach.

Retained search

You pay for the search itself, not only the result. The firm puts a team on it, works exclusively and reports on progress. This is the norm in executive search. If you cancel or fill the role yourself, the stages you have paid are usually kept by the firm, so read the terms before you sign.

Hybrid search

Also sold as engaged or container search. An upfront payment, usually credited against the final fee, buys priority and exclusivity for a set period. It fits roles that matter too much for a contingency queue but aren't senior enough for a full retainer.

Which to use

If you can name ten companies where the right person works today and the role isn't confidential, start with contingency and brief two or three specialists. If the hire is senior, confidential or has already failed once, pay for a retained search.

Most firms charge a percentage of the hire's pay. The ranges below are the ones commonly quoted in the industry. They are not figures from our own data.

Contingency

15–25%

of first-year base salary

Retained and executive search

25–35%

of first-year cash compensation, often with a minimum fee

Guarantee period

60–90

days is typical before a replacement or rebate lapses

On a $150,000 base salary, a 20% contingency fee is $30,000. Agencies in the UK and Germany usually quote fees the same way, as a share of the first year's salary.

The headline percentage is only part of the cost. Check these before you sign:

• The fee base. Base salary only, or base plus bonus, sign-on payments and equity? Get it in writing.
• The guarantee. If the hire leaves or is let go within the guarantee period, the firm either finds a replacement for free or refunds part of the fee, often called a rebate. Check which, for how long, and what voids it.
• Expenses. Retained firms sometimes bill research, advertising or travel on top of the fee.
• Off-limits. A firm won't approach staff at its own clients. Ask which companies that rules out, because it narrows your search.
• Candidate ownership. Contingency terms often make a fee due if you hire someone the firm introduced within six or twelve months, even for a different role.

For New York, our anonymous fee survey collects what firms actually charge, by specialty.

Ask every firm on your shortlist the same questions, so you can compare the answers.

• Specialism. Does the firm spend most of its time on your function and level? A firm that placed ten financial controllers last year knows that market better than a generalist. Specialist focus is the largest part of our index score for this reason.
• Recent placements. Ask for three comparable hires from the last 18 months. Company names can be left out.
• Who does the work. Find out who will run your search day to day and how many other searches they have open.
• Process. How will they build the list of target companies, how often will you hear from them, and what does a progress report contain?
• Terms. Fee, fee base, payment stages, guarantee and expenses, all in writing before work starts.
• References. Speak to a client and, if you can, a candidate they placed.

A search is only as good as its brief. Before the first call, write down:

• What the person must achieve in their first year.
• Must-haves and nice-to-haves, kept apart. Three to five must-haves is plenty.
• The pay range, including bonus and equity, and how much room there is.
• Location, office and remote arrangements, and any travel.
• Companies to target and companies to avoid.
• The interview stages, who makes the decision, and your timetable.
• What the recruiter may say about your company if the search is confidential.

Then agree how often you will speak and how fast you will give feedback on candidates. Good candidates often have other offers, and slow feedback is a common way to lose them.

Our brief form asks for most of this and sends it to the specialist firms in your city. They reply with their approach, fee and guarantee.

A headhunter is an expensive way to hire. Skip one when:

• Your job ads already bring in qualified applicants. Pay a fee when advertising has failed, not before.
• Your own recruiters have time for the role and it isn't confidential.
• You can't yet describe the role. Searching while the brief keeps changing wastes your money and the candidates' time.
• You are hiring many junior people at once. Job boards, campus hiring or a staffing agency for temporary cover usually cost less.
• You already know who you want. Approach them yourself, but check any agreement you have signed first in case a recruiter introduced them earlier.