Getting the most out of a headhunter
Headhunters -- or search or staffing firms, as they're more formally called -- are
often a hiring manager's best remedy for a staffing crisis. Whether you're retaining a
search firm to find the perfect chief technology officer to formulate your start-up's
development strategy, or paying a staffing agency to hire 20 engineers for a product
launch, the right outside recruiter can make the critical difference. But with search
firms demanding commission as high as 50 percent of the target position's first year
salary, hiring a headhunter is a major commitment from a purely monetary standpoint.
Plus, you can ill afford to discover months later that the work was shoddily done.
How do you find the right headhunter, then make sure the firm delivers what you
need? Experts and hiring managers concur that, in a sense, it comes down to being a
headhunter of headhunters. You must make sure the agency knows your needs and your
business just as well as it knows the talented people you want to hire. In other words,
you must build good relationships, with frequent communication, flexibility,
understanding, and a little schmoozing.
Meet your new business partner
There are two main types of headhunters: retained (you pay a percentage of the
open position's salary, regardless of whether anyone is hired) and contingency
(you pay a percentage of the salaries only of those who are hired). Some firms offer
hybrids, says H. Michael Boyd, director of human resourcing strategies at International
Data Corp., a market research firm in Framingham, Mass. Fifteen percent of the target
position's salary is the lowest fee nowadays, but one-third is common and 45 to 50
percent is not unheard of, Boyd says.
Retained firms, such as Heidrick & Struggles International of Chicago and Korn/Ferry
International of Los Angeles, generally aren't interested in doing searches for jobs
that pay less than $150,000. In IT, that means CIOs, CTOs and above. Both companies run
Websites targeting a lower-salary middle market for positions earning between $100,000
and $150,000. Numerous staffing firms place IT jobs at that level and below. Some
firms, called boutique agencies, are small but effective because they focus on
a specialty like the fast-growing bioinformatics field.
"Like any business, there are good, top-notch service providers, and there are
crooks," Boyd says. "Good agencies like to establish a relationship with a company and
become an extension of the company. They're really your recruiter, and they're out
there representing you in a very positive light."
Due in part to the labor shortage, the industry has its share of sweatshop-style
agencies and unscrupulous fly-by-nighters. How do you tell the good from the bad?
Network. Ask your CIO buddy who it was that got him or her the job. Talk to IT
consulting or venture-capital firms: they often use headhunters themselves or know who
their clients have used. And when you're talking to a particular staffing firm, ask for
its client list. Make sure you call those companies.
Boyd adds that most states have headhunter associations, such as the Massachusetts
Professional Placement Consultants (MPPC), that publish membership lists and codes of
ethics. There are also state boards that arbitrate disputes between hiring companies
and headhunters, or between firms that claim commissions for the same placement, says
Negotiate the fee. Seek a long-term relationship, but make it
contingent on getting a break from the standard fee, Boyd advises. If you're hiring a
lot of people, ask for a volume discount.
Look for a refund policy. According to Lou Rubino, director of
staffing at Braun Consulting, an IT firm in Chicago, "most of the firms will give you
anywhere from six months to a year" to decide if a new hire is working out. If you
decide that he or she isn't, "they'll give you a full refund or they'll replace the
person for free."
Make sure the headhunter's off-limits (antipoaching) policy is to your
liking. The strongest ones prevent the headhunter from hiring away anyone from
your company for at least six months after the placement. But some firms try to limit
these restrictions to certain departments. If you're not sure, run the policy by your
Keep your human resources department closely involved. The
reason: IT managers with discretionary money for headhunters may be more likely to cut
a bad deal due to inexperience, says Boyd.
Always have an internal person managing the process. Otherwise,
it will break down, Rubino warns. "If someone isn't doing that on a timely basis, the
search firm can't calibrate itself," he says.
Boyd says that job seekers who want to make themselves known to headhunters should
do the same research that he recommends to companies, and prepare marketing collateral
that will help the agency sell them to its client companies. Most of the headhunters
also encourage résumé submissions at their Websites.
Here again, knowledge is power. Two keys to building positive relationships with
headhunters are to have a realistic view of your career so you don't seek jobs you
aren't ready for, and to know which headhunters specialize in your field. That's the
word from Kalvin Thompson, a partner in Heidrick & Struggles' global practice for CIO
and CTO recruiting. "'Candidates' need to make sure they get to the right person who
deals with that business," he says.
Boyd says working with the wrong headhunter hits job seekers doubly hard because of
the side effects of the wasted time. "For most job candidates, wasted time translates
into dissatisfaction, self-doubt, and depression," he says. "It causes the person to
feel like a bad candidate."
Voices of experience
Karl Brensike, CEO of NetHesive, an Internet software developer in Torrance, Calif.,
says he couldn't have launched his one-year-old company without headhunters. He
desperately needed a chief software architect to plan and manage development. "The
first time we started, we tried the Internet and we couldn't find anyone," Brensike
says. The situation became so serious that Brensike ordered his six top sales and
technical people to drop everything and find headhunters and candidates. NetHesive
worked with more than 60 headhunters; eventually, one found Mark Winkler, who had made
a name for himself at Shopping.com, later selling it to Compaq. NetHesive also found
its vice president of product development through a headhunter.
Brensike believes that above all else, you need to make sure headhunters understand
your business, which can be especially tricky for dot-coms and other start-ups with
unusual products or business models. "In the back of their head, they've got to be
thinking, 'Mark would absolutely love working here,'" Brensike says. "You really have
to sell them on your business model and how you're going to make money." More so than
established companies, start-ups must do this effectively or they might not have a
business. "I talk to the venture capitalists," Brensike says, "and one of their biggest
concerns is, 'Are you going to be able find good people, and keep good people?'"
Brensike tells cautionary tales about the smaller contingency firms. "The hard part
is that since you haven't paid them yet, they'll just flood your fax machine with
résumés," he says. But that's not necessarily a bad thing, says Rubino,
who ran worldwide recruiting first for Digital Equipment Corp. and then for Compaq
after it acquired DEC. "The cost you pay is [that] you have to go through that
paper," he says. "But in the end, if you like that candidate, you'll probably get your
Most of these experts can cite horror stories -- thankfully rare -- about
unscrupulous headhunters. Here are some folks to watch out for:
Inexperienced employees of staffing firms. A good example would be the poor sap
who violated his company's own off-limits policy (possibly accidentally) by calling
NetHesive's vice president of operations, who recognized the phone number on his caller
ID. When the headhunter denied it, the VP kept asking questions, till finally the man
cracked, sputtering "Hey, I'm calling from a headhunter firm, I'm new, and I don't know
what I'm doing," Brensike recalls with much amusement. Now NetHesive has a procedure
for screening such calls.
Managers who are on the take, OKing a hire and getting a kickback from the
Headhunters in cahoots with people who change jobs frequently.
Headhunters who withhold negative informative and stick you with a poor
Rubino's advice: "Always do the due diligence."