Executive recruiters fill a critical need for human resources departments. Executive recruiters work for executive search firms to fill vacant positions within their area of specialty, for example, finance or publishing. Such headhunters may also be generalists, recruiting for virtually any position. Using an executive recruiter and a staffing agency brings with it advantages and disadvantages.
A disadvantage of using executive recruiters is the high cost to hire from them. Recruiters charge a percentage of a candidate’s first year’s annual salary and bonus as their fee. As of 2011, the average percentage is 25 percent; however, some agencies have been known to charge as high as 35 percent. This cost far exceeds how much it generally costs a business to place ads and screen candidates on its own.
A major advantage to using executive recruiters is the turnaround time in hiring employees and having them start. Since executive recruiters solely interview candidates and place them with their clients, almost all recruiters have a substantial candidate pool from which to pull. So the recruiter likely already has qualified candidates ready to fill an opening. A Robert Half study shows that the average hiring time from start to finish through their service is 2 1/2 weeks -- less than it takes for a business to hire on its own.
Candidates frequently form loyalties with their recruiters. In fact, a recruiter might routinely place the same candidate in various jobs over the course of each other’s careers. Such loyalty is potentially a disadvantage to an employer, because the recruiter may keep the candidate informed of other opportunities that are out there. Contractually, recruiters can't "pull" a new employee for one year; however, recruiters have covertly done this in the past -- although very rare.
An advantage to using an executive recruiter is the guarantee period of 90 or 120 days that follows a new hire. If the candidate does not work out for reasons other than a companywide layoff, then the recruiter will refund the agency fee to the company. This "candidate guarantee" offsets the risk of hiring for a 90- to 120-day time period.