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Understanding this nuance is necessary, both for the employer and for the job seeker (candidate).
The difference between a recruitment agency and an executive search firm/headhunters.
Whether you are an employer or a job seeker, it is always useful to specify which players are in the recruitment ecosystem in order to properly compare the services according to your expectations, the strategy to take depending on the position to be filled and the available budget. It seems that sometimes employers want to understand the fees and added value of our services, especially if they have not had prior experience with executive search firm services. Job seekers can sometimes confuse experiences with recruitment agencies and the role of headhunters. However, although both actors operate in the field of recruitment and are external to the employer they represent, their approaches and working methods are distinct.
Let's start with some definitions:
AGENCY: A recruitment agency is a company that specializes in finding, selecting and matching qualified candidates with vacancies within other companies.
The agency adopts a business model focused on filling a large volume of positions by working “on a contingency basis,” meaning that it is paid only if the employer hires the proposed candidate. Employers may choose to engage multiple agencies simultaneously in hopes of speeding up the recruitment process. For job seekers it can be advantageous to regularly consult agency sites and keep their CV up to date in their database. However, expectations must be managed, as monitoring and approach may be less regular, given the lack of obligation and/or formal link with the mandated employer. The question of managing expectations is also true for the employer who mandates the agency; if it is mandated by another employer for a position that it has a greater probability of filling, it is normal that the hours deployed are directed there. In doing so, one cannot expect “VIP” treatment without any out-of-pocket costs or guaranteed payment.
Executive Search Firm (or headhunter): An executive search firm is a company specializing in the recruitment of highly qualified professionals and senior executives for strategic positions within organizations.
Firms generally adopt a formula based on “retainer fees” and therefore take fewer mandates simultaneously (by consultant), thus offering a more professional, personalized and structured experience. Headhunters work proactively to identify, approach and convince potential candidates who have the skills and experience their clients seek. Job seekers often wrongly think that the headhunter will represent them and take the steps for them with employers who interest them. Job seekers sometimes confuse it with an athlete or celebrity agent role. The headhunter works and represents the employer who mandates him, he is the extension of his human resources department. He will ensure that he regularly communicates the progress of the file to his client and will make it his duty to keep the candidates he represents well informed of the progress of their application.
The main difference between a firm and an agency lies in the exclusivity of a mandate. When an employer mandates a firm or headhunter, the latter becomes solely responsible for the search for this position, with fees retained and the contractual obligation to fill the position.
The warranty is also another differentiator. Depending on the level of position, there are guarantees which vary from 0-3-4 or 6 months, sometimes more. The average guarantee offered by headhunters is around 6 months. Usually, this guarantee applies only once, if the person hired leaves or is fired within the time limit established in the contract.
The fees are also different. In addition to the payment terms addressed above (contingency VS retained), agencies will typically charge less, usually between 15% and 20% of the candidate's salary. While executive search firms will charge between 25% and 35% of the salary on average, all depending on the firm and the level of position in question. We also see some players offering "à la carte" or flat rate packages but generally we are talking about fees based on the salary of the successful candidate. Some will calculate their percentage of overall compensation, including bonuses, and others will calculate it only from the base salary.
In all cases, whether you are an employer or a candidate, make sure you understand the business model of your recruitment partner and, above all, regardless of their approach, that they have a reputation for integrity, rigor and that they are ideally a member of a professional order or association.
As an active job seeker (candidate), it is an excellent idea to visit the websites of recruitment agencies and firms in order to fully understand the type of mandates they carry out. Some specialize in sales or legal, others are more in the mining or IT sector. This identification step will prevent you from throwing your resume to the wind and not obtaining the desired results.
If you have maintained links with headhunters throughout your career, now is the time to tell them about your new reality and update your application file. They are pro-active and in some exceptional cases able to introduce you to a client in an exploratory and confidential approach.
As a company (employer) that decides to collaborate with an external executive recruitment partner, it is equally important to carry out some research that will confirm the decision to move forward with one partner rather than another. Call on your professional network: do they recommend firm names? Take the time to call a few and clarify your needs, explain whether this is a confidential search or not, understand the type of positions the firm carries out. At this point, request a service offer which you can then compare with 2 others. Beyond the fees, you must ensure that the firm chosen is trustworthy and that the recruiter who will carry out your mandate is recognized for the quality of his interventions, his ethics and that he will be able to represent you well as an employer brand on the market. After all, he will be THE person who gives THE famous “first impression” of your company and your role to potential candidates, make sure he embodies your culture. The bond of trust will be forged throughout recruitment process and a professional complicity will be established to facilitate the execution of the mandate, and this despite the pitfalls somethimes inherent in a headhunt!
Some useful links:
https://carrefourrrh.org/outil/lignes-directrices/code-conduite-conseiller-recherche-cadre
https://acsess.org/fr/au-sujet-dacsess/code-de-deontologie-et-des-normes