In the meantime, headhunters have become indispensable in the field of personnel recruitment in many industries: Specialists and experts are missing everywhere in the STEM field – and thus threaten the success of many companies. Even in times of the Covid-19 pandemic – according to the Ernst & Young SME barometer in March 2021 – 54 percent of German SMEs see the shortage of skilled workers as the greatest threat to the development of their own company.
Almost full employment has changed the German labor market significantly in recent years: skilled workers and experts are no longer actively looking for a job, but in most cases are in permanent employment. As a result, vacant managerial and specialist positions in companies are difficult to fill. This not only entails considerable economic losses for the company but also jeopardizes long-term goals and successes since tasks and orders cannot be carried out. Paradisiacal conditions for a headhunter: He is used when companies (have to) become active themselves in the matter of personnel search and go in search of suitable candidates for vacancies.
But what exactly does a headhunter’s range of tasks actually include? What does the term mean? And which strategies and areas of application belong to headhunting? Our article aims to provide more clarity in a broad professional field and offers you a comprehensive overview of all the tasks, strategies, costs, and advantages of a headhunter.
Definition ‘Headhunting’ – An industry expert on the hunt for skilled workers
Literally translated from English into German, the term ‘headhunter’ means something like ‘headhunter’. In practice, however, only the principle has remained of this martial origin: the task of a ‘headhunter’ is defined in the Gabler Wirtschaftslexikon as ” the targeted search and selection of qualified and often very specialized specialists and executives by specialized personnel consultants on behalf of companies “. . The aim of a headhunter is, therefore, to identify potential candidates for a vacant position and – if necessary – to steal them away from the competition.
It is still above all the IT and tech industry that registers the greatest need for specialists and executives: The HR Report 2021 by Monster Insights finds that 49 percent of HR managers in the IT and tech sector are looking for new jobs want to create. In order to get these positions filled, these companies absolutely have to rely on headhunting experts, because IT headhunters are usually more and better acquainted with the cross-company job market than HR managers and companies. You have daily practice indirectly addressing target groups and, ideally, insider access – both to companies and to decision-makers at the managerial level. These exclusive contracts usually develop over the years of a headhunter’s career.
Professional career: Headhunting thrives on professional experience
Headhunting is not an apprenticeship or study. Skills, contacts, and experience arise from professional experience and practice in the headhunter profession. However, in high-end personnel consultancies, a degree is required. In tech headhunting, a technical degree or professional experience in this field can be a great advantage. In executive search, in particular, headhunters either have previous experience in a company outside the HR area before they move on to higher-level headhunting, or they have established themselves in an entry-level position with personnel consultancies and have worked their way up the ranks. In addition to employment with personnel consultancies, recruitment agencies in the human resources departments of companies, headhunters can also work independently.
Industry knowledge is the most important requirement in headhunting
Most headhunters specialize in one professional field, ie in-depth and distinctive industry knowledge (e.g. the IT industry) is essential for working in the field of headhunting. Nevertheless, a high level of adaptability and a quick grasp are among the most important qualities of a recruiter, because: more and more positions that combine interdisciplinary approaches and can be assigned to different industries have to be filled.
Figures from 2018 show the enormous need that companies have for headhunters: According to the BDU industry association, 72,000 vacancies were filled by specialists and managers through headhunting. Sectors that benefit particularly strongly from headhunters are above all IT and telecommunications, but also chemical and pharmaceutical industries as well as manufacturing, mechanical engineering, and the logistics industry.
Headhunting in times of the pandemic: Digitization has also arrived in the personnel search
With the global Covid-19 pandemic, the day-to-day work of headhunters also changed fundamentally: Before 2020, the headhunter profession was mainly based on making personal contacts, maintaining networks in persona, and trade fairs or various other events were part of daily business. Today, the world of work in the headhunter industry is becoming more and more digital: New Work and Work 4.0 have also arrived in the recruiting business. Due to travel and contact bans, headhunters are hardly ever on business trips, and trade fairs and networking events are being relocated to the digital space. Face-to-face meetings – whether with clients or potential candidates for the client – also take place mostly online.
But what exactly does the work of a headhunter look like in an increasingly digital world? Which explicit tasks does the headhunter’s targeted (online) personnel search consist of and which strategies are used in headhunting?
Tasks of a headhunter: Everything is possible, nothing is mandatory!
Working as a headhunter includes numerous and very diverse tasks and processes on the way to finding the perfect candidate. Headhunters combine all tasks in one person. If a headhunter is commissioned by a company, a machine is used in various processes.
Basically, seven core tasks of a headhunter can be identified, which are associated with different strategies:
#1. assessment of the circumstances
Before the search for a new employee starts, it is part of the job of a headhunter to assess the circumstances as precisely as possible in order to find suitable candidates for a company as efficiently and quickly as possible. The company search, the job market, and the candidate situation must be analyzed in detail before headhunting begins: Where are the pitfalls of the industry? How big is the shortage of skilled workers really? Which employee benefits or attractive salary models could suitable applicants value? Only when these basic success factors have been clarified and the situational conditions have been fixed does the headhunter set the focus of the industry and vacant position on the possible candidates themselves. With this information, the headhunter can then specifically compare the strengths and weaknesses of the searching company with the requirements of the candidates to match and arouse their interest of candidates.
#2. Profiling of the candidate sought
An essential task of a headhunter is detailed profiling of the sought-after candidate together with the client company. Here, the client and headhunter jointly determine a requirements profile and define in it all the qualities that the ideal candidate must have for the position to be filled. Profiling is therefore a basic strategy in headhunting, on which all other processes related to the search for employees are based. In doing so, headhunters primarily take into account experience, which should ideally be listed in the CV of a possible employee, but of course also certain skills, knowledge, and strengths, which must be set as an unavoidable qualification hurdle. But companies and headhunters also define personal requirements, that a potential new employee absolutely needs, for example, the willingness to travel, to move to a new city, or certain qualities such as leadership potential or the ability to work in a team. It is not uncommon for the headhunter to take over the optimization of the Job Ad. The more competently the job analysis is carried out, the more suitable the candidate proposals that the headhunter selects are usually.
#3. ‘Direct Search’ of suitable applicants
Once the company and requirement profile has been defined, headhunters start looking for the perfect candidate who combines all the desired and required characteristics. The headhunting strategy of ‘direct search’ (‘ executive search ‘ for executives ) or ‘direct search’, ‘direct approach’ or ‘active sourcing’ works nowadays in the upper segment, above all via social business networks such as Xing, LinkedIn or similar In the less qualified sector, temporary employment agencies and personnel service providers also use social media channels such as Facebook.
In addition, a well-trained and well-maintained network of business contacts from past recruiting projects is the be-all and end-all of a headhunter. Headhunting agencies can usually fall back on their own databases and pools of applicants and can therefore often approach suitable candidates more quickly.
One of the tasks of a headhunter is to actively contact suitable candidates who normally belong to a group of people who would not apply for the position advertised by the company if they were not approached directly. Interesting candidates are either contacted directly by headhunters via their own database or external networks, or they are written to by email. Direct contact makes it possible to win over very specific, often highly qualified people from the hidden candidate market for a career change.
Direct telephone contact was the first choice in headhunting before the age of the internet. Headhunters can be put through to the respective employee via the head office or other contacts in the company. This form of headhunting is still carried out today, but mostly only for very exclusive, upper-level top management positions.
#4. Potential analysis and assessment of interesting candidates
If a potentially suitable candidate is interested, the headhunter arranges an initial (telephone) interview. On the one hand, the position to be filled is described in more detail during the interview. On the other hand, the opportunity is used to get to know the possible new employee better in order to find out whether there can be a fit between the company and the candidate. The headhunter not only checks the necessary qualifications but also checks that the ideas of the candidate and the company match, for example with regard to the corporate culture.
At the same time, however, the tasks of a headhunter also include the analysis of potential and the assessment of interesting candidates. The headhunter sorts and evaluates interested people based on the profile requirements and framework parameters created together with the company. This creates a strategic shortlist of interesting potential new employees that the headhunter can send to the client. The potential of each individual candidate is determined, personal strengths and weaknesses are communicated and the headhunter’s recommendations are highlighted.
#5. Support in the selection process
Once the headhunter has selected candidates for the shortlist, he contacts the client company again and presents the profiles of interesting potential employees. If the company shows interest in individual candidates, individual appointments are arranged. Comprehensive support for the client throughout the selection process is part of a headhunter’s job: for example, the headhunter often coordinates the respective interview appointments for candidates and companies, takes over the communication, and thus remains the ‘mediator’ between the two parties.
If there are any uncertainties on the part of the company, the headhunter can also intervene or provide support in an advisory capacity. Many companies also attach great importance to the headhunter’s personal impression of the candidate, since the previous interviews usually reveal a lot about the potential and personality of the candidate. In addition, successful headhunters often have a well-developed knowledge of human nature and can therefore make an exclusive recommendation to the company in order to speed up or shorten the selection process.
As part of filling projects for exposed vacancies, headhunters offer support in the area of suitability diagnostics, assessments, and support during selection interviews. Many personnel consultancies offer this as a consulting service and leadership advisory.
#6. Verification of certificates & references
In the course of the selection process, it goes without saying that the qualifications of the applicants must also be checked. Therefore, another task of the headhunter is to check all certificates and references of the potential candidates. Headhunters are used above all when it comes to filling positions for highly qualified specialists and managers, which are usually also associated with high economic costs for the company. It is all the more important to check that all documents are correct so that the customer is on the safe side – financially and personally. For example, it is part of the job of a headhunter to follow up on references given or to take a closer look at diplomas.
#7. Advice and moderation of the contract negotiations
Ideally, one of the candidates suggested by the headhunter who fits the profile of the company will be hired after the selection process. In this case, advising and moderating the contract negotiations can also fall within the range of tasks of a headhunter. It is important here that the headhunter still represents both parties and thus acts as a ‘mediator’ between the company and the new employee. If there are discrepancies about individual points of the employment contract, the headhunter can intervene and solve any problems. With the signing of the employment contract, the most important tasks of a headhunter are successfully completed.
Onboarding is also a critical phase that shows whether the right candidate has actually been selected. In this process, the headhunter is available to both the company and the new employee in an advisory capacity or can even be actively commissioned to provide onboarding advice.
Benefits of Headhunting: Why You Should Definitely Invest in a Headhunter
It is now known exactly how the headhunter proceeds, which tasks he has, and which strategies are used in headhunting. Nevertheless, many companies still shy away from hiring a headhunter: High costs, uncertain success, and the granting of deep insights into company structures are just a few of the prejudices that have been established against headhunting and that should be revised or corrected here. In the following, you will find out what advantages the use of a headhunter brings and what concrete benefits arise for a company if a headhunter intervenes in the personnel search.
#1. Time is money – also when looking for personnel
When it comes to filling a key or managerial position, time is literally money. If you rely primarily on passive recruiting methods, such as posting a job, you often don’t get the highly qualified candidates you want. Internal recruiting departments usually do not have the resources and tools to ensure full-scale, active recruitment.
Waiting is long and costly as your business will lose revenue if vacancies remain unfilled. Even if a headhunter has to be financed, it is usually cheaper for a company to hire a headhunter than to wait months for a suitable applicant. With a headhunter, you can find new specialists and executives actively, faster, and in a more targeted manner, thereby increasing the capacity of your company. Because a headhunter – especially in a specialized area such as IT – has daily experience in actively recruiting and selecting candidates and has a broad network. This saves you a lot of time and you can usually fill your vacancy much faster.
#2. Headhunters prevent wrong appointments
The higher the requirements or the more specific a position to be filled, the more difficult it becomes to find the right new employee for it. In addition to the cost factor ‘time’, the wrong appointment rate of specialists and executives must not be ignored.
Often, a job advertisement may not be tailored exactly to the actual requirements of your vacant position, or you may only hire the second-best applicant. If you find out after a while that there is no ‘perfect match between the company and specialists and managers, your company will have to cope with major financial losses in the worst case. Managers, in particular, earn large sums of money, so companies may lose a lot of money if they are wrongly appointed.
If you hire a headhunter, you can be sure that they will look for an employee exactly according to your ideas and will also put them through their paces. In addition, you only have to conduct an interview with promising candidates, as all unsuitable candidates are sorted out in advance. Headhunting saves your company time and money – and protects your nerves in the long term.
#3. The more specialized the activity, the more useful a headhunter is
In the IT and tech sector, there is usually a search for highly qualified specialists and managers whose work requires highly specialized characteristics. The search for highly specialized workers is often not part of the day-to-day business of a human resources department, because it is very time-consuming and requires in-depth knowledge of the industry and good contacts.
It is therefore worth hiring a headhunter who specializes in this type of personnel search (e.g. in Tech & IT) and who acts in a way that is appropriate to the target group. A headhunter’s strategy is to constantly monitor the labor market and to be aware of its pitfalls. To do this, they maintain databases of potential candidates and are usually deeply rooted in a well-functioning network of contacts. In headhunting, an extremely high effort is made that a normal human resources department cannot afford.
#4. Anonymity is a major benefit of headhunting
Another big advantage of a headhunter is the absolute anonymity of the position to be filled and the company. Companies often want to remain anonymous at first, because the personnel vacancy should not get through to competing companies and the positive image should be maintained. And if an employee who is still working in the company is to be replaced, the parallel anonymous search for a suitable successor is essential in order not to cause any unrest in one’s own company.
A discreet approach in the recruitment process, but also trusting handling of internal company information that should not be made public are direct benefits of a headhunter. Anonymity and discretion have top priority in headhunting.
#5. Headhunter Advantage: Clear and honest feedback
The job market in the IT and tech industry has changed significantly in recent years due to the enormous shortage of skilled workers. Not all vacancies are filled primarily through job advertisements for a long time now. According to various studies, an average of 50 to 70 percent of all vacancies in companies are not openly advertised, but instead placed on the hidden job market. Top positions in particular are sometimes associated with desired requirements of possible candidate profiles on the part of the company, which simply cannot be implemented.
The advantage of a headhunter is that, as an external recruiter, they can criticize the desired profile more easily and honestly than, for example, an internal HR department. In this way, wishes and requirements for possible candidates can be discussed with the headhunter right from the start and can be realistically fixed in order to avoid wasting time and unnecessary effort.
Headhunters, therefore, bring great advantages in the search for specialists and executives, e.g. in the IT and tech sector. If you choose a headhunter, you still face a major challenge, because: How can you, as an entrepreneur, recognize a good and qualified headhunter?
How to recognize a qualified headhunter
The headhunting industry is characterized by a problem: the profession of a headhunter is not protected by law – anyone can call themselves a ‘headhunter’. It is therefore difficult for companies to find the right service provider with the appropriate qualifications. We have already compiled a detailed headhunter checklist for you on how to find and select the right headhunter. It is important that you know who or what exactly you are looking for. In this way, you can already narrow down the field of potentially suitable headhunters during the search process and examine them extensively.
External recruitment: How much does a headhunter cost?
If you are toying with the idea of hiring a headhunter to search for personnel for your company, possible costs are of course also a relevant factor that influences the decision-making process for or against a headhunter. Headhunters are not cheap, but the numerous advantages that you and your company get from headhunting make up for the high costs: You save time and money since you will not find any wrong appointments, you are guaranteed to be placed with highly qualified specialists, and executives in a timely manner and the highest discretion does not let competing companies prick up their ears.
In general, the amount of the costs for a headhunter cannot be generalized, since there are different fee models in the industry. Most often, however, the remuneration of a headhunter is based on the annual target salary of the respective manager or specialist. At the beginning of the project, advance payment is usually due so that the headhunter can cover expenses incurred during the direct search. If the placement is successful, the headhunter then receives a commission:
- This amounts to around 25-35 percent of the placed candidate’s entire first year’s salary.
- The filling of niche positions can be remunerated significantly higher, in some cases up to 50 percent of the first annual salary is paid for executive search.
However, some recruiters also rely on a flat fee, especially when it comes to filling a top position in a company. Factors such as the industry, the position to be filled and the headhunter’s effort can also influence the amount of the fee. For example, if the headhunter has to travel across the country to conduct personal interviews, the expenses and thus the effort involved in recruiting personnel are significantly higher and, of course, so is the headhunting fee.
Caution! In principle, you should always discuss the costs incurred when you start working with a headhunter so that you do not experience any nasty surprises after a successful placement.
Conclusion: Headhunter definition, tasks, and benefits
Especially in the IT and tech industry, the search for highly qualified specialists and managers is often lengthy and difficult, as competent workers have been in short supply for years. Qualified and reputable headhunters will help you to fill vacancies quickly, easily, and discreetly.
Headhunter sind meist tief in einer spezifischen Branche verwurzelt und können über ihr ausgeprägtes Netzwerk an Professionals gelangen, die für Sie als Unternehmen auf regulären Bewerbungswegen unerreichbar wären, da sie bereits in einer guten Position angestellt sind oder sich möglicherweise gar nicht von Ihrem Stellenangebot angesprochen fühlen. Das vielfältige Aufgaben- und Strategiespektrum eines Headhunters reicht von Profiling über die Direct oder Executive Search bis hin zur Unterstützung bei möglichen Vertragsverhandlungen und bietet so eine umfassende und ganzheitliche Unterstützung im Personalfindungsprozess.
Despite the costs that are not negligible, which usually amount to 25-35 percent of the first annual salary of the placed candidate, hiring a headhunter offers many advantages: Vacancies are filled much faster than with classic job advertisements – this saves your company an enormous loss of sales and lots of time.
The more specific the requirements for a specific position, the more worthwhile it is to employ a headhunter. This not only significantly reduces the risk of wrong appointments but also minimizes the burden on your HR department, which is often overwhelmed with the search for highly qualified specialists. Honest feedback, which only an external headhunter can afford, and its guaranteed discreet and anonymous approach are among the great advantages of a headhunter.
What you should definitely consider: Check the qualifications, experience, and seriousness of a headhunter before you hire them to search for personnel for your company. In addition, you should always conclude a written agreement on services and conditions in advance so that you are not confronted with nasty surprises at the end of the project.
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