Are headhunters worth it?

By Janet Fowler

From both companies and job seekers alike, there is often much confusion about what recruiters, or headhunters, actually do, and whether they're worth the sometimes high fees they command. Like many things in the business world, the answer ultimately depends upon your company's needs, the current state of the job market and how unique the position is that your company is trying to fill.Inside the IndustryMost recruiters have industry-specific niches. Whether your company is in the medical field, construction, engineering, insurance, law or just about any other business, there's probably a recruiter that specializes in your industry. These recruiters have extensive knowledge of the particular challenges and trends that your industry is currently facing, and will be able to tailor their candidate search to ensure they're locating the very best talent.Time Is MoneyIn business, time is money. Screening and recruiting new hires takes time, and a good recruiter will perform these tasks for you. They'll advertise the role, scour their own database of candidates, screen incoming resumes and headhunt passive candidates, sending you only the very best candidates they find. The recruiter's work eliminates your company's need to sift through the massive number of resumes that come in and limits the number of interviews you'll have to conduct to only a few.

Established Business NetworksOne of the primary selling features of recruiters is their developed pool of business contacts. It's important to be well connected when you work in the recruiting industry, and for that reason recruiters constantly attend business lunches and networking events, spend massive amounts of time reaching out to people through online forums, and develop large pools of outstanding candidates that they can market to companies that may be interested in them. There's a good chance that when you contact a recruiter who specializes in your area of business, it may already have someone in mind who can fill the gap in your organization.Access to Passive CandidatesThe term "headhunting" came about as a result of the way that many recruiters source passive candidates: they "hunt" for the right person to fit your company's needs. Recruiters can often gain access to people who are not looking for a new job, and might even work for your direct competition. If these candidates are successfully recruited into your company, it could help you gain a competitive advantage.Results Come With a CostWhen it comes to recruiters, everyone worries about the cost. The truth is, sometimes using a recruiter can cost a lot. Most recruiters bill their client companies by charging them a percentage (generally in the range of 20 to 25%) of the salary that a successfully placed candidate will be paid in the first year. If it is a particularly high-profile position, this fee could represent a fair chunk of change. In many cases, the cost is worth it if the position is highly specialized or if the job market is particularly competitive. On the other hand, the same could be true in a job market flooded with candidates, where the amount of time required to sift through resumes and screen candidates could be astronomical.Additionally, many employers don't have to pay recruiters until the employee officially starts work, so if the search is unsuccessful, your company owes nothing, and most new hires also typically come with a guarantee period of three to six months. However, if you're working with a retained recruiter, your payment structure may be based upon its ability to produce suitable candidates, regardless of whether you hire those candidates.The Bottom LineThe important thing to remember about recruiters is that they aren't all created equal. Some recruiters and recruiting firms use more methods to source suitable candidates than others do. Also, some recruiters invest far more time into research and the tracking of passive candidates than others do. Be up front with your recruiter about what you need, and don't be afraid to ask questions about what search methods they'll be using on your behalf. At the end of the day, having talented staff is worth it - as long as you're spending your recruiting dollars wisely. 

   Originally posted on Investopedia.com INVESTOPEDIA ULC ©2013