Ditch the fees: 2 alternatives to expensive headhunters

Unemployment is just 4%. In a tight labor market, job applicants have the upper hand, making it difficult to fill your open positions as quickly as you’d like.

What makes this hiring season more challenging is working with headhunters. With exorbitant fees and adverse incentives, a recruiting headhunter may not have your best interests in mind. 

But you have options. Avoid expensive headhunters with these two alternatives.

Two alternatives to expensive headhunters

What is a headhunter?

A headhunter is an outside resource hired to fill an open position within your organization. They work with your recruiting team or executives to contact and screen the most qualified candidates for a particular job. Because they typically work in verticals, such as the tech industry, and hire for higher-profile positions like executives and directors, headhunters have a deep knowledge about the job market and candidate pool for that vertical.

How much does a headhunter cost?

Headhunters earn a commission contingent upon successfully placing a hire inside your company. Successfully meaning the hire accepts an offer from the company and/or must remain in their new position for a certain number of days for the commission to be sent. Some headhunting agencies charge a retainer fee up front (⅓ to ½) with the balance due upon a successful placement. 

Most often, headhunters charge commission based on the position’s first year salary, ranging from 20% to as high as 45%. And because they normally recruit for higher-profile positions, salaries can be six figures. Meaning that in a given year, you may be handing over hundreds of thousands of dollars, if not millions, to these recruiters.

Why do job seekers dislike headhunters?

Headhunters sometimes provide a less-than-ideal candidate experience to your top draft picks. And a poor candidate experience leads to losing out on the best talent and negative word-of-mouth about your organization in the job market. The insufficient experience isn’t intentional: It’s a result of the design of headhunter recruitment models where the result is tied to a per head fee, paid to the agency and trickles down to the individual headhunter. The temptation, therefore, exists to cut corners in the process with the candidate or to concentrate efforts on the jobs that pay the most in commission and are easiest to fill. And frequently, the candidate gets neglected. And the candidate is the number one reason we’re all working to fill a job in the first place.

We believe that a person’s career should never be based on a recruiter’s fee. 

Candidates want: 

  • Meaningful career discussions with those who have their career’s best interest at heart
  • To be listened to
  • A coach or a guide to help them achieve the next level in their career
  • To improve their career situation in a significant way
  • An experienced recruiter to help them move as seamlessly, quickly as possible through the hiring process.

And in this competitive job seeker’s market, you need to provide as fast a process as possible to get top draft picks. Want help reducing inefficiencies in your hiring process? Read more here.

So you’re looking to make changes to your recruitment strategy and hiring process. Analyze these headhunter alternatives and determine which option is best for your organization.

Headhunter alternative #1: RPO

Recruitment process outsourcing is contracting your talent acquisition strategy and process to an external recruitment consultant. Designing your recruitment process to attract, hire, and retain the best talent possible, RPOs are highly engaged and committed to their client relationships. Because they are far more strategic than headhunters and staffing agencies, they work with companies for a longer term.

Differences between headhunters & RPOs

Choosing which positions they want to fill based on comfort, experience and commission, headhunters are paid per filled position. On the other hand, RPOs are normally paid per project, hourly, retainer, or a mix of retainer and performance bonus across many positions. And, the bill is often 60-75% less, Including the money your company saves in internal overhead. An additional benefit to your hiring process, RPOs aren’t focused on continually finding new clients and selling their services. This leaves more time for them to be proactive and get every detail of your recruitment strategy right.

RPOs’ strength comes from experience, access to technology and reach to create a better candidate experience for your top draft picks. RPOs measure success with metrics like time-to-engage, cost-per-applicant, cost-per-hire, quality of hire/new hire retention, and yes, okay, time-to-hire. But, beware of the time-to-hire rabbit hole about which my friend Tim Sackett writes.

Because an RPO’s success is quantifiable, they use advanced tools to track your hiring process. Applicant tracking systems, recruitment marketing software, interview platforms – you name it.

Why choose RPO over headhunter

With Field of Talent’s RPO offerings, you can speed up your process by 3x and get the top talent you need to grow your organization. Schedule your free consultation.

Headhunter alternative #2: Staffing firm

Need a temporary hole or pre-determined role filled quickly in your team? Staffing can help you get the job done. Just like the other options listed above, a staffing firm acts as a middle man between your organization and job candidates. Typically, they have a roster of pre-qualified candidates or they can quickly access a talent pool and provide the best people for your open positions.

Differences between headhunters & staffing agencies

Staffing agencies offer a wealth of benefits. More flexibility, regulatory compliance, speed, and pre-qualified candidates make your process far easier. However, like headhunters, they don’t have your long-term interests and business goals in mind. Their goal is to fill your position as quickly as possible with top talent that will hopefully stick around at your company for a long time to come. If you have a short-term gap in your team and a predetermined start and end date for a new hire, a staffing agency is an ideal partner.

The best headhunter alternative for you

Depending on your company’s goals, the best choice for a headhunter alternative will vary. 

You can take the pressure off your recruitment budget opting for an RPO relationship that provides a more strategic approach and advantageous cost structure.

If you’re seeking a short-term position and not an outsourced strategy and process, a staffing solution will fulfill your needs.

No matter your industry or size, Field of Talent can help determine your best path forward. Get your free consultation to reveal gaps, fill them and achieve your business goals.

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Ditch the fees: 2 alternatives to expensive headhunters