I've often come across professionals who lack the knowledge and understanding of what reallt ther term headhunter or headhunter refers to. To make things simpler, let's make an attemp to understand this. Headhunters is a colloquial term for recruiters, employment agencies or executive search firms that broker human resources. Like real estate, stock brokers and sports agents, headhunters are in the middle of an employment sales transaction: they solicit customers (companies with job openings willing to pay a fee) and they seek talent (people with specific skills).

Contingency fees, typically paid by the hiring company, vary depending on the position and quality of the applicant. Normal agency fees are 10 to 30 percent of the applicant's first year salary and are paid after the applicant is screened, hired and performs successfully for a few weeks or months.

High-end executive search firms, such as Korn/Ferry, Spencer Stuart & Associates, or Heidrick & Struggles, get an up-front fee of US$30,000 or more to perform a specific search for a specific manager, officer or executive. Unlike recruiters and agents, executive search fees are not contingent. They collect search fees in advance and are paid irrespective of whether or not they fill the position. These searches (often called assignments) are typically for C-level (CEO, CFO, etc.), direct reports to C-level executives, and board members. These firms are client-focused, as opposed to candidate-focused. That is, job candidates cannot solicit them to "find a job". Executive search is roughly a $1+ billion business annually. Competition is assured in the market, as search firms must commit to off-limits agreements. These agreements prevent a firm from using employees from their clients as candidates for other clients (for instance, if Korn/Ferry places the new CEO of GE, they will agree not to place GE executives at other companies). This prevents any one firm from having all or even a majority of the search business, as it would prevent them from having a wide enough pool of candidates to fill those searches. Conversely, search firms will also refuse business with certain companies, in order to preserve their ability to pull candidates from those companies.

Headhunters tend to either be generalist or specialize in a particular niche. Niche headhunters are typically boutique firms dedicated to a small area of expertise, such as Sano Bioscience, which specializes in clinical development positions (regulatory, clinical, medical) within the biotechnology industry. Tech USA Tech USA focuses on a variety of IT jobs. Another example of niche headhunter is Big Fish from France, focused on purchasing jobs worldwide.

Anuj Jain