The first thing to consider when judging headhunting fees is that a true headhunting process is not comparable to a typical recruitment agency service and as such it is usually more expensive.
A headhunting process is very much a research-led project with an intensive research phase preceding any candidate conversations. This is very skilled and labour intensive and as such you should expect to pay more for a headhunting service than for a typical recruitment agency service.
What are typical Headhunter fees?
A typical recruitment agency fee will be 15% to 20% of first year salary, usually payable on the start date of the successful candidate.
A typical Headhunter fee will be more like 30% of first year salary with the fees broken down into instalments, usually 3 stages:
- 10% of salary payable on commencement of the research stage
- 10% of salary payable at shortlist stage
- 10% of salary payable on completion of the project
Some headhunters will also charge expenses which are either charged on a cost basis or as an add on to their fee (usually fixed at 10% of the total fee)
Headhunters will usually estimate the salary they think a client will end up paying for the purposes of calculating the first 2 parts of the fee and then adjust the final payment up or down according to the actual salary agreed (though some headhunters will only ever adjust the payment up and if a client ends up paying more than the headhunter anticipated, the client will end up paying a fee that equates to more than the % quoted)
It is also important to understand exactly what the % fee relates to. In some cases this is charged on guaranteed salary only but other headhunters fees charge on anticipated earnings which for any role that carries a bonus could increase the fee substantially.
eg 30% of an £80,000 basic salary would be £24,000 but if there is a £30,000 potential bonus on top then the fee could rise to £33,000 if this is taken into account so it is really important to check with your headhunter exactly what their fees include.