Headhunter – definition and meaning
A headhunter is a person or agency that looks for high-flying executives to fill positions in companies. They may also identify and approach suitable candidates for posts in the public sector and other organizations. In the non-business world, a headhunter collects the heads of enemies as trophies.
We often refer to headhunting agencies as executive search firms.
This article focuses on the term’s meanings in the world of business, finance, and jobs.
Put simply; a headhunter finds talented people that would be the best to work for their clients. Clients approach headhunters when they need to fill a top or important position.
Cambridge Dictionary has the following definition of headhunter:
“A person who tries to persuade someone to leave their job by offering that person another job with more pay and a higher position.”
Some people say Cambridge Dictionary’s definition is too narrow because headhunters also approach unemployed people. The unemployed executives that headhunters may seek are those that form part of **frictional unemployment.
** Frictional unemployment consists of people who are in between jobs. They are sending resumes, going to interviews, etc.
Headhunters are involved in ‘headhunting’ or ‘executive search.’
Headhunter – different types
There are several different types of headhunters. For example, they may be companies or individuals that operate like employment or recruiting agencies.
A company may hire a headhunter to find talent and to seek out people who meet certain job requirements.
However, the term may also include people or agencies that already have a pool of job-seeking executives.
In other words, headhunters may work either for a company or executives looking for jobs. They may seek out people on behalf of companies, or look for jobs on behalf of individuals.
However, we usually think of agencies seeking out individuals when we hear the word ‘headhunter.’
Why use a headhunter?
Why do companies choose an external executive search firm? Usually, it is because they do not have internal research resources. Also, they may not have evaluative skills or professional networks.
Using an outside headhunter also gives employers more choice. For example, with an executive search firm, they have the freedom to recruit from rivals.
In other words, they might be able to poach a competitor’s executive without having to do so directly.
With headhunters, employers can also choose among candidates that they would not be able to meet through other means.
Some executive search firms are international. This means that they have access to potential candidates from more than one country.
The top five headhunting firms in the US are Heidrick & Struggles, Korn Ferry, Spencer Stuart, Egon Zehnder, and Russell Reynolds Associates. According to Wikipedia, each one has estimated revenue exceeding $251 million and at least 118 consultants. Revenue in this context means income.
Headhunter pros and cons
Using headhunters to fill vacant or potentially vacant jobs can be expensive. How do you decide whether it is worth the money? First, you need to weigh the pros against the cons.
Below is a list of advantages and disadvantages sourced from ProfitGuide.com:
– Headhunters usually have good contacts. They can get in touch with more people than most employer’s can. Put simply; they may provide more choice.
– Employers pay for what they get. In other words, clients usually pay a percentage of the new executive’s annual salary. However, the agency only receives payment if the new employee stays for at least a certain period. (Price is also a disadvantage – see below.)
– Agencies are useful for projects. In other words, they can help fill gaps rapidly.
– The headhunter may not understand the client’s corporate culture. ProfitGuide.com quotes Beth Boyle, from TalkShop, who said:
“On paper they [candidates) can have the skills, but the culture fit might not be there.”
– Executive search firms are very expensive. Fees may be as high as 35% of the new employee’s annual salary. If the new employee earns $150,000 per year, the fee will be $52,500.
Even the cheapest headhunter won’t charge less than 15% of annual salary.
– There are other options. HR consultants can do the recruiting work and charge the client an hourly rate. For a small company, this option may offer better value for money.
Also, if the client has several vacancies, an HR consultant may make more sense.
– With a headhunter, the client is letting a third party represent it. This is risky. Employers need to be sure that they are representing the company well.
However, they must not micromanage headhunters. Otherwise they cannot do their job properly.
Video – What is a headhunter?
This Collingwood Executive Search video explains, in 25 seconds, what a headhunter is.