How much does a headhunter cost?

When specialist and management positions need to be filled in competitive industries, that's when the hour of the headhunter strikes. But when is it worth hiring an external personnel consultant and what costs should one expect?

An external personnel consultancy has its price, but nevertheless executive search is not a discontinued model. Quite the contrary - in recent years, the number of positions filled by an external consultant has increased. We provide you with information on the different fee models of headhunters in our blog post.

Reputable headhunters search specifically for suitable candidates for each individual position and talk to them about the position, rather than simply scouring their database and network on their own for people willing to change jobs. If a successful placement takes place, the fee is usually calculated on the basis of the annual salary for the position in question. In addition, headhunters usually also guarantee that a candidate successfully passes the probationary period and, in the event of termination, fill the position free of charge.

The placement fee naturally depends on the position to be filled. For specialists and executives, fees of 20 to 30 percent of the first target annual salary are common. For executive positions, a fixed price is often negotiated in advance. In addition, there are often the costs for the job advertisements, which are distributed on various channels, such as jobs.ch, as well as costs for identifying and approaching candidates and conducting interviews. There are two common fee models for headhunting: the retainer model and the success model.

Retainer model

If the client and recruiter agree on a retainer model, the fee is usually paid in three steps. In this model, a large part of the fee is not linked to the placement. The headhunter receives the first third as a start-up fee immediately after placing the order to cover part of his costs. The second third is due when qualified candidates have already been presented to the client. If the client then hires one of these candidates, the headhunter also receives the last third of the agreed fee.

Success model

If the client and the recruiter agree on a 100% success model, the headhunter's performance and work is remunerated only if one of his presented candidates is hired. In this model, the headhunter often also guarantees the probationary period, so the risk for a company is low.

At Batterman Consulting, we also work purely on a contingency basis. Together with you, we analyze your needs and define the recruiting strategy. Through targeted direct approaches in our networks and databases, as well as through social media research and international direct search, we promptly acquire attractive candidates for you who are not actively looking for a job. With personal evaluation on our premises, reference checks and assessments through to onboarding, we offer you a full service and support you throughout the entire recruiting process.

Conclusion

Handing over a search mandate to a headhunter is never for free, as you would not offer your entrepreneurial services for free either. The costs are a necessary investment, which should always be seen in relation to the profit, the top candidates. Top employees do not only do a good job, they increase the attractiveness of a company, possibly attract further talents and increase the company growth. Thus, they also increase the value and profits of the company in the long run. Seen from this perspective, the investment for an external headhunter is quickly recouped.