Headhunter vs. Recruiter: What’s the Difference

Headhunter vs. Recruiter: What's the DifferenceIf you’re having difficulty finding new employees, you’re not alone. 45% of U.S. hiring managers are in the same boat.

A lack of applicants is one of the top reasons behind difficulties in finding new hires. Another is the insufficient number of qualified candidates.

Unfortunately, the longer a job remains unfilled, the less profit a business can make.

That’s enough reason to consider hiring a headhunter or recruiter. Both can help you fill vacancies. However, who to choose depends on what you’re looking for in a new hire.

I know about this personally –  because I am a bestselling author and entepreneur with about 2 million books and courses sold globally.

Plus I’m well known for my business consulting .

So I pulled together this helpful article. Coming up you will find a headhunter vs. recruiter comparison guide. Read on to learn what sets these two apart and when to hire which.

What Is a Headhunter?

Also known as an executive recruiter, a headhunter looks for potential job candidates. They can be individuals or companies that businesses needing talents can retain. Their job involves locating high-level professionals with skills that meet specific job requirements.

Headhunters also work with clients to define the ideal candidate. This may include a candidate’s education, skills, and previous work experience.

Once they have that list of requirements, headhunters can start looking for candidates. They also reach out to their prospects.

Headhunters tell candidates about their clients (the companies that hired them to headhunt). They tell these prospects about the skills and talents their clients are looking for.

Headhunters may then create a report of the talents who are or seem interested in their offer. They pass this information along to their clients. They’re usually not part of the hiring process itself.

Next up, let’s compare the difference between a headhunter vs. recruiter.

What About a Recruiter?

A recruiter is a professional tasked to attract, find, and screen job applicants. Many are part of a company’s human resources (HR) department. Others work for third-party agencies that contract with companies looking for new hires.

Unlike headhunters, recruiters play a role in the entire talent acquisition process.

For example, recruiters write descriptions for the jobs their clients need to fill. They then create and post job advertisements for the vacancies. They also typically review resumes and contact prospective applicants to schedule interviews.

Recruiters also often conduct job applicant interviews and screening processes. In some cases, they may hire those who pass themselves. Others may work with their client’s hiring managers, helping them decide who to hire or reject.

How Much Do Headhunters Cost?

Headhunters usually charge about 30% of a new hire’s first-year salary. So if your potential employee’s annual salary is $75,000, the headhunter gets $22,500.

How and when you pay headhunters depends on their compensation requirements. Some charge a “retained fee,” while others work on a contingency basis.

With a retained fee, you often must pay the headhunter in three installments. For example, the first 10% at the research stage, the second 10% at the shortlist stage, and the last 10% after the hire.

The research stage is when the actual headhunting occurs. The shortlist stage involves narrowing down the list by identifying the best candidates. The last phase is when the client company hires one or more of the talents the headhunter found for them.

A contingency agreement involves paying the headhunter a lump sum. The upside is that they can only charge you if they complete the job. So as long as they haven’t found the talent you need, you don’t have to pay them anything yet.

Few headhunters work on a contingency basis, but if you find one, consider working with them. A good enough reason is that they’ll be more likely to fulfill their role since their income is on the line.

Next up, let’s compare the difference between a headhunter vs. recruiter.

How Much Do Recruiters Cost?

Recruiters may charge 15% to 20% of the new, full-time hire’s first-year salary. This often depends on the availability of applicants. The more prospective hires a role has, the less work for them, so the less they charge too.

So for harder-to-fill positions, expect recruiters to charge more. It’s common for them to enforce a 25% fee for roles with minimal applicants.

Headhunter vs. Recruiter: When to Hire Which

Headhunters and recruiters are both recruiting professionals, but the positions they fill differ. They also use different methods and strategies to find prospective talents.

To help you decide which professional you need, consider the following situations.

You Don’t Have a Dedicated HR Department

Many startups and small businesses don’t have an in-house HR department.

Having no HR may be okay for such firms since they have fewer people to manage. It’s also more practical, as hiring an HR specialist costs a lot. To give you an idea, their median yearly wage reached $62,290 in 2021.

However, not having a dedicated HR department also means someone else must do the hiring. As the business owner or manager, this can be you, or it may be another person you assign to wear the HR hat. Either way, this extra (often unpaid) role can lead to issues, such as hiring the wrong person.

You can avoid such problems by working with a recruiter. They can help you fill vacancies as they arise, or you can hire them for a one-time recruitment role.

You Need a High-Level Talent

Work with a headhunter if you need a high-level executive role in your company filled. These include high managerial or leadership positions.

A headhunter can also help you find high-quality talents in highly skilled professions. Engineering, accounting, technology, and manufacturing are some examples.

You Need Multiple Talents

Work with recruiters if you need several entry- or mid-level positions filled. Likewise, they’re your best bet if you must hire for these roles over the next few months.

Recruiters can help attract more candidates by advertising the jobs you offer. They can continuously screen applicants and create a pool of ready-to-hire, qualified talents.

Some recruiters also specialize in specific markets, such as the procurement industry. So if your company is part of this sector, you can use these expert procurement recruiters. They can quickly gather a group of qualified applicants, usually within two weeks.

Your Candidates Are Already Employed

Headhunters specialize in actively seeking the best candidates for their clients. This often means scouting talents who already work for other companies.

Suppose your company is looking for an artificial intelligence (AI) specialist. AI specialists are already scarce. In one study, 63% of respondents even said AI is one of the areas where they have a significant skills shortage.

In the example above, a headhunter can help by researching AI specialists, employed or not. To do this, they would likely search professional connections and databases. They may also review other companies’ rosters to find where the AI specialists are.

After creating a small pool of candidates, headhunters then approach them. They won’t coerce the talents to switch employers. However, they’ll present an attractive offer to encourage their prospects to do so.

You Need Staff ASAP

Headhunters often target specific individuals, while recruiters usually work with more applicants.

For example, recruiters may already have an existing roster of talents looking for a job. This allows them to fill their clients’ staffing needs immediately.

Recruiters also help fill positions quickly by attending job fairs and networking events. At these events, they hand out flyers advertising their clients’ vacancies. They also set up booths where they can interview or pre-screen applicants.

Recruiters can also help with urgent staffing needs through widespread job postings. They advertise these on various online and offline platforms.

From there, recruiters accept and sift through resumes. They decide who gets a chance for an interview based on their clients’ criteria. They then communicate with and interview qualified applicants.

You’re Looking for a Specific Role

Suppose you’re the talent looking for a top-level role to match your high-level skills. In this case, consider working with a headhunter.

A headhunter can help you find a job by matching you with available positions. They can refer you to their clients if you have the right qualifications.

However, prepare for scrutiny; a reputable headhunter will verify your credentials. They won’t just trust your word because it’s their job on the line if it turns out you’re not a good match for a role.

Also, don’t expect immediate results when working with a headhunter. Remember, these experts usually work with companies requiring high-quality professionals in specific industries. So while you may be a top talent, it doesn’t mean a company already needs to hire you ASAP.

You Need Seasonal Employees

Many businesses and companies get busier during the summer or holiday season. This is especially common in industries like tourism, retail, and transportation.

If your organization belongs to any of those sectors, it may need to hire seasonal employees.

Seasonal employees are individuals hired to work part-time or for temporary positions. They offer their skills to help employers meet increased seasonal demands.

Recruiters can help you in such situations by sending applicants your way. In many cases, these potential employees have already undergone pre-screening. All you need to do is decide whether to hire them or not.

Some recruiters also specifically work with part-time or temporary workers. As a result, they can immediately provide you with a roster of seasonal employees.

What to Look for in Headhunters

A headhunter may have numerous successes hunting tech professionals. That’s incredible, but that may not be as useful if you need a high-level engineering expert.

One reason is that a headhunter may not be that knowledgeable about your industry. So they may not understand the characteristics and qualifications you need. This can lead to them not finding the right person for the role you must fill.

Candidates themselves may look into a headhunter’s experience. They may not negotiate with a headhunter who has no industry-specific expertise.

Thus, one of the first things to look for in a headhunter is their experience in your industry.

However, it’s still vital to consider a headhunter’s experience filling high-level roles. They must have effective recruiting methods they can prove with a stellar record.

So, work with a headhunter who’s landed a few big names in your industry. It doesn’t matter if they did headhunting for your direct competitors. The most important thing is that they were successful.

Ideally, you’d also want to choose a headhunter who works on contingency. This doesn’t mean those who only work for a retained fee are bad choices. However, those who charge on a contingency basis may be more purpose-driven.

Many reputable headhunters are open to fee negotiations, so don’t hesitate to ask. As a first-time prospective client, you could get them to agree to a contingency payment.

How to Choose the Right Recruiters

If you need recruiters, base your decision on your staffing needs. For example, if you need part-timers, your recruiter must specialize in their recruitment. Because if they only fill long-term jobs, they may be unable to help fill your temporary vacancies.

You should also look into the recruiters’ talent acquisition process. What methods do they use to attract, communicate, and screen applicants? Ensure their strategies align with your company’s mission, vision, and goals.

Another crucial consideration is a recruiter’s turnaround time. The last thing you want is to choose a recruiter charging a low rate but can’t fill your vacancies on time. They should have a track record of finding qualified candidates quickly.

Consider working with recruiters who cater to your industry, too. This is especially vital if the positions you must fill require specific skill sets. Recruiters may not fill high-level roles, but they should still find you the right people.

Hire Only the Best Headhunters vs Recruiters

As you learned in this headhunter vs. recruiter guide, both are experts in finding talents. The chief difference is the type and skill level of the talent they seek.

Headhunters vs Recruiters Recap

  • Headhunters focus on high-level candidates
  • Recruiters specialize in entry- to mid-level roles

Regardless of which professional you need, do your due diligence before hiring them. This way, you can rest assured you’ll have those open positions filled ASAP.

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