With today’s lousy economy and thousands of people unemployed, you might ask yourself WHY a company would employ a headhunter.
At Catalogs.com, we are facing this exact dilemma regarding a highly skilled computer programmer with a very specific skill set required. All too often, companies end up hiring who they “thought” would be a perfect candidate for a specific job, but as it ends up, the person fails miserably at following through on the tasks assigned and after 1 full week on the job, you realize you hired an incompetent person.
At this point, you probably have received hundreds and hundreds of resumes, called or attempted contact with about 50 people, spoken to about 20 in a telephone interview, invited about 10 candidates to come in and meet face-to-face. Then, after doing background checks and checking and verifying references, you decide to offer Candidate Joe the job, only to find out you are too late and Candidate Joe already accepted another position. You now have wasted time, resources, and potentially let a different candidate slip through the cracks. Hiring an executive recruiter/ headhunter may be worthwhile … look for these 5 qualifications:
1. Flexibility – In the “old times” when it was hard to find really qualified people, headhunters could demand fees of 25-40% of the hiring base salary. With today’s economy, try to negotiate and get a comfort level for the principal’s willingness to negotiate. If they are completely non-flexible, move on … there will be plenty of firms that will attempt meeting half-way with your expectations in mind.
2. Contingencies & Payment Terms- The big question: Exclusive Contingency vs. Non-exclusive Contingency – opt for something in the middle. I try never to hire a headhunter with up-front fees. I much prefer signing an exclusive arrangement (for a given number of months… say 3 months) and paying a contingency fee (a fee that is paid only when the position is filled). The days of paying flat rates up-front are no longer necessary. However, the pitfall is that the recruiter may attempt to endorse a candidate that is less than qualified in order to fill the position and collect your fee. Payment terms should tie in with the guarantee period. Do NOT pay the full amount up-front upon immediate placement. If you have a 120 day guarantee period (which is preferable) then schedule the payments over 120 days.
3. Guarantee & Termination – If I’m shelling out between 10-25% of a base salary to the headhunter, I want a guarantee that if the person hired does not work out, for ANY REASON, that the headhunter will find me a new candidate, at no additional cost to me. This is a difficult negotiating point, but one that, in my opinion, can be a deal breaker. If the headhunter won’t guarantee that the employee remains at the company for at least 270 days, then I have no interest.
4. Contract Term – I would prefer not being locked in for any time commitment. But on the other hand, it probably is not realistic wishing when I am asking for a strict contingency. We all have to play fair. Therefore, if I am asking the firm for a contingency, then I should be expected to give up to a three month exclusive contract to allow the headhunter time in recruiting and interviewing the perfect candidate.
5. Confidentiality – Make sure that the executive recruiting firm respects and honors your confidentiality. Many presidents and CEO’s prefer to discreetly employ a headhunter, and often will keep an ongoing relationship with top headhunters for the purposes of keeping an eye on the industry, and keeping potential options open.