What Is a Headhunter Fee and How Much Does It Cost?

What Is a Headhunter Fee and How Much Does It Cost?

Right now in the United States, there are nearly 11 million job openings. Finding the best fit for your career goals can be overwhelming, but there are specialists out there who can make the job hunt streamlined and easier.

Are you embarking on your next career journey? A recruiter or headhunter may be able to help you along the way. They are experts in perfecting applications and finding great job fits.

Keep reading for all you need to know about utilizing a recruitment specialist and paying a headhunter fee.

What is a Headhunter?

A headhunter is an independent contractor that specializes in filling open roles in companies. While a headhunter may specialize in filling upper-level roles in companies, they can hire all ranges of employees. They are hired on behalf of companies and organizations to effectively fill roles with qualified candidates.

There are two primary ways to hire a headhunter. Headhunters can be held on retainer, meaning the company pays the headhunter upfront to fill their open roles. Headhunters can also be hired on a contingency basis, meaning they headhunter receives their fee when the role is successfully filled.

How do Headhunters Find the Best Candidate?

Headhunters and recruiters work with a wide network of companies to find the best candidates for open roles. They look on behalf of the companies and organizations through a field of potential candidates.

A headhunter will reach out to candidates, scout potential talent, pre-screen and review applications. If a headhunter identifies a candidate they feel may be a good match, they can reach out to them directly to discuss the position.

Maintaining a large network of both potential hires and hiring companies is a crucial component of the headhunter’s job. By regularly expanding their network, they will almost always have candidates and job postings at their disposal.

These recruiters and headhunters have years of experience in identifying talent for companies. They know exactly what to look for in a resume and in an applicant and can make great recommendations for the companies that employ them.

Some headhunters and recruiters are industry-specific (for example, healthcare). By specializing in the needs and specifics of unique industries, they are able to optimize their candidate search for the best possible applicants.

Once potential candidates are identified, a recruiter can put together a list of the top applicants. From there, the hiring company can set up supplemental interviewing and make an offer.

Headhunters are standardly paid once a candidate is successfully hired, so their job is not over until the contract is signed.

What is the Difference Between a Recruiter and a Headhunter?

Recruiters and headhunters work towards a common goal, but there are some key differences.

A recruiter is either directly employed by the hiring company or a recruitment firm. They work effectively as hiring managers.

Internal recruiters work by guiding candidates through the entire hiring process and are able to make job offers internally. External recruiters are able to do quite a bit of pre-screening on behalf of the hiring company, but the company will be making the final decisions and offers.

Meanwhile, a headhunter is a contracted freelancer or external employee that does not directly work for the hiring company. They do not conduct any of the hiring processes or make job offers. Rather, they simply make the connection between a potential candidate and the company.

What is a Headhunter Fee?

To be paid for the time and effort it takes to identify and hire exceptional candidates, headhunters charge a fee. The fee is usually proportional to the salary of the hired candidate.

The headhunter fee can vary widely depending on the difficulty of placing the role. A highly qualified candidate in a niche role will typically expect a higher salary, and the headhunter’s fee will increase accordingly.

Headhunter’s fees are usually built onto the hire’s contract. The fee is usually based on the first-year salary of the candidate and any sign-on bonuses they may be adding.

Who Pays the Headhunter Fee?

The hiring company or organization is typically the paying party. They bring in the headhunter to find qualified employees for their role, and they are paid by the company when the role is filled successfully.

However, if you are seeking employment with a recruiter, you may have to pay a fee.

Headhunter Cost

A standard headhunter typically charges between 20-35% of the first-year salary. This can vary widely by the experience of the headhunter and the company the headhunter works for.

Imagine you are hiring for a director’s role at your company. A candidate is hired with a headhunter with a rate of 25%. If this position’s salary is $200,000, it can be added onto the contract that the headhunter will receive $50,000.

Fees for the applicants can vary. Many recruiters offer some free services for persons seeking employment. Some recruiters may charge a fee for their services, or for some of their services.

Be sure to be clear with a potential recruiter or headhunter what your expected headhunter fee will be in advance.

Can I Find Employment Through a Headhunter?

Recruiters and headhunters can give you the support you need to find your dream job! Searching for jobs hiring near me? Consider working with a recruiter!

A recruiter is great for applicants who have niche skills or talents. They can also be exceptionally helpful in candidates in fields that are understaffed. The more you stand out amongst other candidates, the more you will be able to stand out.

If you don’t have specialized skills, don’t let that scare you away! A good recruiter should still be able to find you a great career match.

Continue reading for some advantages of working with a recruiter.

Constructive Feedback and Application Optimization

Recruiters have seen it all. Viewing job applications every day, a recruiter knows all of the what-to-dos of applying for jobs.

After reviewing your application materials, your recruiter can provide some constructive criticism or advice. A resume or CV can be heavily nuanced, and getting the language and formatting just right can be the difference between getting a job and not.

The same goes for cover letters, recommendations, or any other materials you may be submitting. It is best to find a recruiter who is familiar with your industry so they can provide the most applicable feedback.

Lean into your recruiter’s expertise! They have seen it all and can tell you exactly how to get the job you want.

Company Networking

Recruiters have access to a huge network of hiring companies. A good recruiter with lots of success placing candidates will have connections with hiring managers at many companies in many industries.

Don’t underestimate the power of traditional networking. Hiring is all about who you know! Recruiters with connections can make it possible for you to cross those bridges yourself.

Once you have refined your application materials, your recruiter can send your information out to many different companies that may be hiring for your role.

Open Opportunities to Private Listings

Sometimes, companies will avoid posting listings publicly. Major companies will have hundreds, sometimes thousands of applications on a single listing. Often, these applicants are unqualified and the sheer volume can overwhelm hiring managers.

Instead, these positions will sometimes be sent to recruitment agencies. That way, the hiring manager only has to review pre-qualified and recommended candidates.

By working with a recruiter, you can have access to these private listings. This can dramatically increase the number of open positions you can apply for.

Foster a Long-Term Relationship

By creating a good relationship with a recruiter, you will be able to have continued success with them in the future. As new roles come available that you may be a good fit for, your recruiter can continue to provide career opportunities and recommendations.

Being on the list of a headhunter’s connections can pay off majorly down the line! You never know when your dream job may come along.

Experience Jobs You May Not Have Considered

A recruiter may have access to temporary positions you can try out. Getting a feel for a position in a temp-to-hire format can have a lot of advantages:

  • Low commitment level
  • “Try before you buy” style hiring that gives you the control
  • Great networking opportunity even if the role doesn’t work out

They may also be able to recommend positions to you that you have not previously considered. Remember, a recruiter has seen it all! They may be able to make some great recommendations for future career opportunities based on your previous experience and career goals.

There are careers out there hiring now that you may not have even heard of before! Keeping an open mind when working with your recruiter can be very beneficial for considering new roles.

Things to Watch Out For

A job recruiter can be a great tool for finding your next career opportunity, but it is not entirely foolproof.

Be sure to hire a trustworthy recruiter. The last thing you will want is to be scammed by a poor recruitment firm. Look for experience and proven results when picking a recruiter.

Stay in contact with your recruiter to make sure applications are being processed and sent out. A recruiter cannot read your mind, so transparency about your career goals and timelines is the best method for getting what you want out of a recruitment company.

Finding a Headhunter or Recruiter

There are sure to be many headhunters to choose from when you begin your job search. Narrow it down using these questions:

  • Does the headhunter have proven success in placing jobs?
  • Does the headhunter have experience placing jobs in your field of work?
  • Does the headhunter have connections at companies you would want to work for?
  • Does the headhunter have a good relationship with business and candidates?

Having a headhunter that can prove their success in your field is so important for being successfully placed in a job. If you are going to pay a recruitment company, you will want to maximize your chance of success!

If your colleagues or friends have previously utilized a headhunter, ask them about their experiences. Having a trusted associate refer you to a headhunter is a great way to break the ice and increase your chance of success.

As the job market begins to thrive this year, the recruitment industry is growing too. Large amounts of movement in many industries are fueling the hot job market. Recruiters are ready and able to help you begin your job hunt.

Speak to a Headhunter Today

Starting a job hunt can be a bit daunting, but there are so many resources out there to help. A recruitment company can help you every step of the way, from refining your application to connecting you to job openings to presenting future opportunities down the line.

While some headhunters may have a headhunter fee, often those costs are covered by the hiring agency or are minimal on your part. To learn more about potential headhunter fees that may apply, speak with your intended recruitment firm.

Headhunters are a great asset to have. If you aren’t satisfied with your current job hunt or are just looking for a place to start, a headhunter can get you moving in the right direction.

Now that you know all of the amazing benefits an experienced headhunter can bring to your job search, update your resume and get in touch with a great recruitment agency.