Extract from the site www.bankrate.com
We've all heard rumors of these shadowy figures in the corporate jungle, how they cut the best and brightest from the working herd and haul them off to better jobs. Too good to be true? Urban myth, you say?
On the contrary, executive recruiters or "headhunters" are a quite real and vital part of the career ecosystem. As independent contractors to corporate clients, they work on either a retainer or per-head fee basis to identify and recruit job candidates for hard-to-fill positions. The hiring company, not the candidate, always pays the headhunter's fee.
Effective networking -- "the back-door method" -- is more important now than ever before. He counsels his candidates to spend 20 percent of their time on the front door (applying for jobs, meeting recruiters, doing the old "post-and-pray" on Internet job sites) and 80 percent of their time making contacts within their industry.
"Going through the back door, it's not about if you've got a job (opening), it's about finding reasons to meet people and get on their radar screens and develop relationships," he says. "It's going to be your job security. We are moving away from the permanent-job economy into a freelance economy, and in the world of freelancing, it is all about who you know."
The field guide to headhuntersEven if you're happy at your present watering hole, it never hurts to know a few recruiters. Things do change and it is, after all, a jungle out there.
Headhunters fall into five main categories, ranging from top-executive recruiters to temporary agencies:
Retained executive search: Hiring companies retain these firms to fill a particular opening or openings at the executive level. The client typically pays a portion of the fee upfront and the remainder when the candidate is hired. A typical fee would be one-third of the position's first-year total compensation; for example, placing an exec at $210,000 would fetch the headhunter a handsome $70,000. The focus of this service is top-level executives (six-figure salaries and up).
Contingency search firms: These firms differ from retained firms in that they only get paid if they successfully fill a position and may be in competition with other search firms to do so. As a result, they typically spend more time developing a buffed and ready pool of candidates. The fee usually is 20 percent to 25 percent of first-year total comp. Middle management placement is the focus of these companies.
Employment agencies: These firms typically collect a fixed fee for successful placement. The focus is on lower, non-managerial levels of the organizational chart.
Outplacement firms: In a twist on the headhunter model, companies faced with downsizing will retain a recruitment firm to find new positions on a fixed-fee basis for their outbound senior management.
Temp services: These agencies fill the temporary staffing needs of their clients. The fee is typically based on a percent of the hourly rate and varies widely. Some temp services offer temp-to-permanent placement that enables the company and the candidate to try each other out before committing. Temp services tend to concentrate on clerical, hospitality and blue-collar placements.