It’s The Headhunter Fee, Stupid!

I read an interesting blog by Ken Forrester that describes very nicely the value in using a head hunter over recruiting for a role directly.  I was writing a similar piece but Ken has summed it up so nicely that I thought I would share his piece with you:

It’s The Headhunter Fee, Stupid!

Employers seldom complain about the services of headhunters, it’s the headhunters’ fee that has become their pain point.

A few months ago I was a presenting at a seminar to about 35 business owners and HR professionals.  The topic of the presentation was “How to Recruit like a Headhunter” and during the presentation I made the statement “if you are not using headhunters as your primary recruitment weapon, then you are not hiring the best talent in-the-market”

One individual took offence to that particular statement and became very irate.   He literally stood up from his seat and while pointing his finger directly at me he said “you don’t know what you’re talking about-because we hired some pretty good people-and they are working out just fine-and we didn’t use headhunters”

Without any hesitation, here’s how I responded:

Sir, you are absolutely correct…you really don’t need headhunters to hire the best talent on-the-market.  However, what would you say was the difference between the best talent in-the-market and the best talent on-the-market?

I watched his eyes rolled over into the back of his head as he struggled to find a good answer.  But, without waiting for his response, I asked if anyone in the audience knew the difference between the best talent in-the-market compared to the best talent on-the-market.  What I heard was a number of resume related answers such as: the ones with the best resumes; or the ones presently work for the big brand name organizations or the ones that were educated from the most prestigious universities.

My reply was that they were all very good answers, but they were not the number one answer.  The number one answer is; the best talent in-the-market are most likely the individuals that are not active searching for a job.  Why? It has been my experience that to be wooed by a competitor is the expectation of the top talents.  They don’t get excited just because a job that matches their skills and experience was advertised-they have to be strategically motivated and sold on that particular job opportunity.

So, if you are not using headhunters, then you are hiring the best talent from only the individuals that are actively looking for a new job.  And, there is a significant difference in the caliber of talent when you compare the ones that are actively looking to the ones that are not actively looking for a new job.

To prove my point, I tried to get the audience emotionally involved in the debate.  I took a quick survey by asking four simple questions.  The questions are as followed:

  1. How many of you know of someone that is actively searching for a job?  Almost everyone raised their hands.
  2. How many of you are actively searching for a new job?  Three individuals raised their hands.
  3. How many of you are not actively looking, but would listen to details about another job opportunity if you believed that it could be of some interest to you? Half of the number of individuals in the room raised their hands.
  4. How many of you are not actively looking, but would seriously consider another job opportunity because you were convinced that the job would not only improve your present standard of living it would also advance you career to the next level?  Almost everyone raised their hands.

I pointed out that the result of that survey was similar to recruitment activities in a niche market.  The best talent most likely will be from the group of individuals that are not actively looking.  So, if you are not using headhunters-you are not hiring the best talent from the entire talent pool; you are hiring the best talent from a small puddle.

With all the new recruitment apps that are available, the big job boards and the growing appeal of social media are you trying to convince us that headhunting is the most effective recruitment method available, was the question asked by the same individual.

I said yes it is and I will tell you why!

The reason headhunting remains the most effective recruitment method is because as headhunters we recruit ahead of the need!

Recruit ahead of the need; I’ve never heard of that, he said.

I said: it means that we don’t wait for a job to become open to start recruiting individuals to fill that job; we recruit the individuals for a job before that job becomes open.  And the only way that is possible is if you are committed to building relationships from a recruitment perspective.  But, you also have to be passionate about recruiting to be committed to it; and when you are committed you will live and breathe recruiting 24 hrs a day, 7 days a week and 365 days a year.  A good headhunter will know who the most talented individuals are, they can identify the hardest workers from the slackers, they know the ones that operate below the radar screen and they also know the ones with the most potential. They do the hardest part of recruiting for you-which is developing relationships.

Apologetically, he said “I didn’t mean to imply that headhunters were not effective, but what are your options if you don’t have the budget to pay headhunter fees?

Therein lies the problem, the headhunter fee.  But it is also a tremendous opportunity for headhunters to make more placements.   How? They just need to do a better job of re-selling the economic value of using professional headhunters or demonstrate creative ingenuity in the pricing of their headhunting services.

The economic value is more profits; because the employers that hire the best talent often win and retain more customers.  Also, why not allow your competitors do the hiring and the training?  You simply rely on headhunters to recruit their best talent from your competitors after they are trained.  Paying jeadhunter fees will be a drop in the bucket compared to cost savings realized in salaries paid to average performers and profits generated from superior performances of the headhunted talent.

 

By re-pricing, I‘m not suggesting simply to reduce your placement fees, but in addition, offer a variety of recruitment services that can be tailored as a solution to the unique needs and budget of your clients.

If all headhunters charge the same placement fee, does it mean that they all provide the same level of service?  No, but that is the perception.  Nothing will change until we change something and that perception is a good place to start.

This blog entry was written by Ken Forrester and you can view Ken’s original blog entry here

Michael Bowden is Partner at Bowden Mayes – a specialist recruitment company focussed on helping recruitment businesses attract senior management and next generation talent.

 

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Artist, Leader or Entrepreneur?

I recently attended the #TonyRobbins Business Mastery course at the Excel in London.  It consisted of 4 days packed with information, tools and techniques on building and growing a business that is continually innovating and performing at its peak, and the best ways to create an exit plan for yourself; be this through creating a leadership team that will enable you to step away from the day to day running of the business, or the best ways to prime it for a sale.   Tony was on impeccable form as normal and had the entire audience (300 business owners ranging from sole traders through to CEO’s of $Billion multinationals) hooked on his every word for 12 – 14 hours each day with regular bouts of audience participation (dancing, yelling and generally jumping around like a loon) to make sure that everyone was in their ‘peak state’ for learning.  This may all sound a bit ‘out there’, but in short it was excellent.  Other world class speakers included #scottklososky, #keithcunningham and #ericedmeades covering Technology, Finance, and succession planning respectively.

One of the ideas that Tony discussed was that we all fit in to 3 categories:

  • An artist – the talented, skilled producer who is an expert at what they do/make/produce and the art is far more important to them than growing a business or managing a team.
  • A leader – someone that can manage, motivate and enjoy leading teams of people.
  • An entrepreneur – the risk taker.  They are happy to take substantial risks to get what they want and will easily bounce back if their ideas don’t work out.

The quickest way to find out which one you are; if you were to lose your job/business today and had to get a new job tomorrow or else you would lose your house, car and all your other worldly possessions; what would you do?  Would you get a role applying your learned skill/trade (artist), would you get a management role where you were leading people (leader) or would you not worry about losing you house, car and possessions and instead get a loan from the bank and do it all again (entrepreneur)?

None is better than the other, and you may have a bit of all of them in you, but one of these traits will be far more dominant in you than the other two.  To grow a successful business that will reach its full potential you need a leadership team who each dominate in one of these areas, so that as a collective you have experts in all 3.

Tony noted that one of the biggest stresses in your life is trying to be someone that you are not.  Lots of us would like to think of ourselves as entrepreneurs, but are we really?  I quickly realised that I was a leader, and my business partner realised that he was truly an artist.  The good news is that we have 2 of the 3 traits already in our team.  To get our business to reach its full potential, we now realise that we need an entrepreneur.

Which one are you…..? And which do you need to get in to your management team to make sure your business is fulfilling its potential?

Michael Bowden is Partner at Bowden Mayes – a specialist recruitment company focussed on helping recruitment businesses attract senior management and next generation talent.