Executive search professionals, often referred to as headhunters, are hired by organizations to fill critical jobs. Search firms are involved in approximately 8-10% of management hires. An executive search firm works for the hiring organization (not the job seeker) to find the best possible candidate. Often the best candidates are not actively searching for a new job.
Typically executive search consultants focus narrowly within an industry and particular function, and are engaged only for the most senior, or mission-critical positions. The fees for the search, paid by the hiring organization, can range up to 35% of the annual compensation of the position being filled. Executive recruiters fall into two broad categories: retained and contingent.
Retained recruiters work with client firms on an exclusive basis and are paid for conducting the search process, including defining the position, qualifications and potential sources of talent. Retained search professionals usually are paid their fee in thirds, at the milestones of search initiation, candidate presentation and when an offer is extended.
Contingent recruiters usually do not have exclusivity to fill the position and are paid only when the candidate they present is hired. In fact, multiple contingent agents may be presenting candidates for a given opening.
Executive search should not be confused with an employment agency, or placement firm, and those that find positions for job seekers are all but obsolete today. Legitimate search firms are always paid by their clients and never by the candidate or job applicant.
The following pages will help you understand the executive recruiting landscape: