OUR BLOG

15 Nov 2017

What recruitment fees should you pay for the highest performing seasoned hospitality talent?

Before making a decision to set up an executive search firm and given our lack of agency experience, we had no choice but to do some extensive market research. We already knew we had over 100 years of hospitality experience between the three of us. So, what were we looking for?

In addition to asking if there was even a demand for senior level 50+ age group candidates with an average of 30 years experience, we looked at what agencies charge. What we discovered was when judging headhunting fees, a true headhunting process doesn’t compare to a typical recruitment agency service. It’s usually more expensive.

The headhunting process is very much a research-intensive approach and gives the client a thorough understanding of what they will need for the position, the skill sets in question, the types of people they expect to attract, and a managed timeline for the project. This process is usually reserved for specialised or senior roles.

Typical recruitment agency fees are 15% to 25% of the first year’s salary, usually payable on the start date of the successful candidate.

On the other hand, the majority of headhunter’s fees will be more like 30% of the first year’s salary with fees usually broken down into instalments as follow:

  • 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

For example, 30% of a £90,000 basic salary would be £27,000 and it’s really important to check with your headhunter exactly what their fees include, in case there are any add-ons to this.

It was clear to us, in order to cut through the crowd, we would need to give outrageously positive service, provide extremely experienced seasoned individuals and charge half of what headhunters normally ask.

30% is a large chunk of anyone’s budget. That being said, hiring companies no longer see this as value for money and invariably refuse to consider prospective candidates to their detriment. By making a conscious decision to charge a much lower fee, we’re hopefully incentivising companies to consider us, and in turn, giving candidates a greater chance of being reviewed.

By Paris Batra

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