Is It Worth It To Pay A Headhunter?

Businesses live and die by the accuracy and thoroughness of their cost-benefit analysis. 

Decision-makers across industries are tasked with making tough decisions that maximize the benefits of their organizational strategies while mitigating costs. If you’re considering partnering with an executive search headhunter, the success of your decision will rely on carefully weighing the pros and cons to ensure the odds of coming out ahead are in your company’s favor. 

This blog will answer central questions and provide actionable guidance that allows you to make a measured and informed decision regarding your organization’s need for an executive headhunting partner. 

What Is A Headhunter? 

A headhunter, also known as an executive recruiter or executive search specialist, is a highly specialized talent acquisition expert that exclusively partners with organizations experiencing vacancies in their most pivotal and impactful roles. 

Headhunters support the success of their clients by leveraging their wide-ranging networks of exciting professionals to efficiently and affordably find qualified job seekers and prospective candidates for their most pressing vacancies. They achieve this by deploying a suite of data-driven strategies, technologies, and tactics to engage, evaluate, and onboard top-performing executives, researchers, and similar niche specialists. 

How Do I Know If I Need To Hire A Headhunter? 

Organizations shouldn’t be too hasty when deciding to hire a headhunter. In fact, most organizations can handle 95% of their recruiting needs (entry, intermediate, and mid-management levels) without ever partnering with an executive headhunter.

So, when should organizations turn to an executive headhunter for help? Let’s look at five common scenarios that call for partnering with an executive headhunter.

1. The role requires niche or rare experience/skills/expertise.
2. You want to invest in your company’s culture.
3. You want to drive innovation and growth with your next hire.
4. You want to enhance your organization’s diversity, equity, and inclusivity.
5. You want to capture the absolute best person for the job – regardless of barriers like geography, access, or employment status. The advanced screening and interview process an executive recruiter will conduct ensures that you find the perfect fit for your position.

What Is The Process Of Finding A Headhunter? 

Finding the right headhunter is of paramount importance. We always recommend companies conduct rigorous and detailed interview processes with every potential headhunting partner to ensure they find the perfect fit for their needs, goals, and desired experience. 

Here are a few questions we recommend asking every headhunter on your shortlist.

1. What is your executive search process?
2. Where do you source candidates?
3. Do you have experience in my industry?
4. How do you gain insight into my organization’s unique needs, challenges, and goals?
5. How do you ensure cultural fit?
6. Do you complete reference checks?
7. Do you practice discretion when approaching candidates?
8. How do you rank and present candidates to your partners?
9. How do you communicate with non-finalists?
10. Do you provide onboarding and/or assimilation support for your candidates post-placement?

What Are The Advantages And Disadvantages Of Hiring A Headhunter? 

There are numerous advantages and disadvantages of hiring a headhunter worth considering. 

Companies that want to maximize their hiring success while avoiding costly missteps should invest in understanding the most prevalent pros and cons of executive headhunting partners. 

For example, notable disadvantages to be aware of include potentially higher hiring costs, more difficulty ensuring cultural fit, and exposing candidates to a less customized, branded hiring experience. 

Advantages include: access to unmatched candidate networks and “passive candidates not currently in a job search, specialized recruiting tools, data-driven candidate evaluation processes, expert guidance and market insights, and a “hands-free” hiring process that allows your team members to focus on growing your organization instead of supporting HR and covering for your vacancy. 

What Is The Average Cost Of Hiring A Recruiter? 

Like most recruiting firms, executive recruiters charge their partners a percentage of each placement’s first-year salary. Most firms charge between 25-35% of the first year’s salary, which equates to roughly 30-50k (assuming an average executive salary between 125-150k.) 

When reviewing potential executive search partners’ fee structures, it’s essential to read the fine print. Most firms base their fee on your vacancy’s salary. Still, some take the value of the entire compensation package, including benefits, bonuses, and other incentives, into consideration – leading to significantly higher costs. Medallion Partners only charges a flat percentage of the candidate’s first year salary, so our clients never experience the unpleasant surprise of an unexpected cost. 

What Is The Average Cost Of A Headhunter In 2023? 

Headhunters base their fees on their placements’ first-year salaries, like most recruiters. 

This fee for a headhunter’s services typically ranges from 25-35% and can include the newly placed candidate’s entire compensation package (including benefits, bonuses, and relocation incentives) or annual salary. Assuming the latter, companies offering reward packages to new executives or specialists in the $120-150,000 range can expect to spend anywhere from around $30k to around $50k. 

How Medallion Partners Helps With The Executive Search Process

Medallion Partners is an industry-leading boutique executive search firm with over 15 years of experience. Over 98 percent of our placements are still in their roles over two years later.

We have unparalleled experience generating exciting, transformative placements for our clients across industries thanks to our expertise, enthusiasm, and one-of-a-kind tools and techniques like our Medallion Matrix. Contact us today to learn more about how we help our clients drive growth, sales, and retention with world-class placements.