What is a headhunter?

The headhunter is a true professional and his activities are part of the professions related to human resources (HR) management. For an employer or for the HR department of a company, choosing a headhunter means finding a business partner who helps the organization meet its needs in terms of human resources.

In Quebec, headhunting, that is to say the search for middle or senior executives, is a profession supervised by a professional order: the Ordre des conseillers en ressources humaines agréés (CRHA). The headhunter has received specific training and follows a professional code of ethics.

This professional works in a recruitment agency by direct approach or acts as an independent consultant who responds to recruitment mandates for organizations and companies. These mandates consist of looking for the best potential candidates for a specific executive position.

Each recruitment mandate is unique and specifies the scope of services needed to recruit. Generally, an exclusivity contract (see below) defines the responsibilities of the headhunter. Indeed, it is common for the recruiter to have to invest dozens of hours of work in research and interview time before the company can do job interviews with the best candidates itself. This exclusivity contract allows him to make his research time profitable.

The responsibilities of the headhunter are numerous. They consist of targeting the right applications and the best CVs, establishing contact during a first telephone evaluation, informing the client about the progress of the file, doing the necessary interviews before identifying the candidates to be recommended and writing follow-up reports, if necessary. This is a work that spans several weeks.

The services offered by a headhunter

A headhunter offers different services that correspond to the needs of companies and the type of position to be filled. The remuneration of the headhunter depends on the type of services that the company that hires him needs. The headhunter can perform:

• Identification and selection of CVs
• Database search
• Conducting virtual or in-person interviews
• Taking references
• Criminal background checks
• Publication of job advertisements and job descriptions
• The direct approach of the targeted candidates
• The offer of psychometric tests
• Assistance in negotiating the contractual agreement

Not all of these services are required in every mandate. Generally, packages apply and each headhunter or recruitment agency operates with its own method of remuneration, while respecting the guidelines governing the profession.

How is the headhunter paid?

The remuneration of headhunters varies according to the different types of contracts in force. That’s why it’s best to check with a few headhunters what types of contracts they prefer. Here are the most common types of contracts:

The contract with deposit

The deposit is a fairly common way of doing things in headhunting contracts. This type of remuneration provides for the payment of a partial sum at the beginning of the mandate or at other stages of the recruitment process. This amount is deductible from the final remuneration and is generally non-refundable.

The payment of a deposit is intended to obtain a firm commitment from both parties. On the one hand, the headhunter is committed to providing the resources of his search service to find the candidate. On the other hand, the company engages in a collaborative hiring process with the headhunter, demonstrating the seriousness of its commitment by paying a deposit. For the headhunter, the contract with deposit allows him to cover part of the costs incurred in the first stages of the process (identification and selection of CVs, search in databases, making contact, etc.).

The contract without deposit

Some headhunters do not require a down payment and only charge at the time of hiring. This is a way of operating that greatly benefits the customer and carries risks for the headhunter. But since headhunting takes place in a context of free competition, some headhunters are willing to take on a greater financial risk, while others are not willing to take that risk. In the contract without a deposit, the amount of services received is charged only when the hired candidate starts working.

This option remains very interesting for employers or their HR department. However, it is essential to offer proactive collaboration with the headhunter to achieve good results. Recruiting high-performing executives is a daunting task that requires a lot of energy and time. The full collaboration of the company in the mandate is essential.

If a headhunter finds that their client is not really engaged in the ongoing recruitment process, they could give up. This is why the contract with a deposit is more common than the contract without a deposit. In the first type of contract, each makes commitments to the other.

Percentage compensation

The majority of headhunters operate with a percentage remuneration that corresponds to a fraction of the annual salary of the hired candidate. The rate charged by headhunters is usually around 20% to 25% (but can be very variable). It is from this sum that the payment of the deposit will be deducted.

Some base the calculation of their fees on the base salary of the position. Other headhunters also calculate commissions and bonuses. It should be noted that the salary associated with a position to be filled may be subject to change during the hiring process, for example if a candidate asks for more for one reason or another.

The fixed flat rate

The flat flat rate allows companies to reduce the risk of a potential increase in the potential candidate’s salary during a tight negotiation during the recruitment process. Remember that the headhunter can play an important role during a tight negotiation on the remuneration requested by the candidate.

It is for this reason that some recruitment agencies or headhunters offer a contract with a fixed amount established at the signing of the mandate. The amount requested may vary depending on the type of mandate. For example, it may vary depending on the hierarchical level of the position (vice-president, executive, senior manager), the complexity of the task or the recruitment challenge to be met, the rarity of the profile of the candidate sought (for example if he is ultra specialized). In this case, the salary offered to the hired candidate will have no impact on the headhunter’s remuneration, compared to a percentage remuneration.

This method of remuneration allows the employer or his HR department to know precisely the costs associated with a particular recruitment, with a kind of anti-cost overrun insurance. On the other hand, if the employer decides for one reason or another to hire a candidate who earns less than originally planned, the flat flat rate could be more expensive than that provided for by a percentage remuneration.

Remuneration in three instalments

Many recruitment agencies offer this method of remuneration, which is based on the payment of one third of the fees at the beginning of the mandate, as a down payment. Then, the payment of the second third is made at the stage of receipt of the CVs or at the time of the interviews. Finally, the payment of the last third is made at the time of hiring. This is a very fair way of operating as it requires each party to work closely together throughout the hiring process.

The post-employment guarantee

Headhunting agencies usually offer a guarantee of 3 months to 1 year on the hiring of the candidate. This guarantee provides for the resumption of the hiring process in order to find a replacement for the candidate initially hired if the hired candidate does not stay in the company. This post-employment guarantee generally covers both voluntary departures and dismissals, under certain conditions.

Some headhunters will offer to modulate their rate downwards or upwards depending on the duration of the guarantee. Thus, as a business, you could pay a lower rate for a 3-month warranty, and a higher rate if you want to take advantage of the one-year warranty.

The different exclusivity clauses

An exclusivity clause is sometimes required or negotiated by headhunters with client companies. Make sure you understand the details of this clause to avoid unpleasant surprises. Here are three main scenarios:

The full exclusivity clause

Some headhunters will require complete exclusivity, that is, you will not be able to mandate another headhunter or another recruitment agency. You will also not be able to make a recruitment process by yourself during this period of time. That is, if you find a candidate on your own, you will still have to pay the headhunter’s fees.

The partial exclusivity clause

Other headhunters will demand to be the only ones working on the mandate, while allowing you to take your own steps. This partial exclusivity clause is sometimes accompanied by a penalty if you terminate the contract before a certain date. One to two months of exclusivity is usually the norm.

The clause without exclusivity

Still other headhunters will not demand any exclusivity. In this case, as an employer looking for the rare pearl, you might be tempted to hire several headhunters who do not require exclusivity to get lists of candidates faster. But this way of doing things, although common, is not a panacea. Initially, this theoretically dilutes the quality of the research that will follow. For example, several headhunters could contact the same candidate in the short interval and this could upset that candidate. But the no-exclusivity clause can also sometimes be a very good option to try to speed up the hiring process.

Questions to ask a headhunter

You see that there are many possibilities. To get a clearer picture, here are some questions to ask a headhunter when you first contact them:

• How many years of experience do you have?
• What are the areas of activity in which you excel?
• What types of positions and hierarchical levels do you prefer?
• What is your methodology in the recruitment process?
• Do you use IT tools, artificial intelligence or social networks to spot potential candidates?
• What services do you offer: CV pre-selection? In-person or virtual interviews? Psychometric tests? Criminal background checks?
• Which method of remuneration do you prefer?
• Are you asking for a deposit?
• What post-employment guarantee do you offer?
• Do you agree to work on recruitment mandates without exclusivity?
• What types of services would you recommend for this recruitment mandate?

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