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Posted on by Thimon Radtke

What Is a Headhunter? Definition and Meaning

What is a headhunter? Definition and meaning

There are currently 1,975 search and recruitment consultancies in Germany, according to the Federal Association of German Management Consultants (BDU). Roughly three quarters of their revenue comes from a single discipline: executive search, usually called headhunting in everyday speech.

The short answer: a headhunter is a search consultant who, on behalf of a company, approaches individual specialists or executives who are not looking for a job at all. They are paid by the company, not by the candidate. In casual use the term is often treated as a synonym for a placement agency, but in practice it describes a narrower mandate: direct approach instead of an applicant database.

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What is a headhunter? Definition and meaning

Translated literally, headhunter means exactly what it says, and the image captures the way of working rather well. Instead of waiting for applications, a headhunter actively looks for people who could already fill a given position today, usually at another employer. Formally, "headhunter" is not a protected job title but a colloquial name for search consultants who specialise in direct approach. In job ads, on LinkedIn profiles and in everyday speech the term is used inconsistently, which adds to the confusion about where it ends and placement or executive search begins.

The BDU divides the sector by revenue: the top 25 firms with more than 7.5 million euros in annual revenue, mid-sized consultancies between 1 and 7.5 million, and boutiques below 1 million. Of the 1,975 consultancies in Germany, the great majority belong to that last group: small, often sector-specialised teams, which is where most owner-managed executive search firms serving mid-sized industry sit. The number of providers has fallen by around 200 against the previous year, and employment in the sector stands at roughly 14,225. That suggests the market is consolidating more strongly now than it was a few years ago.

What does a headhunter actually do?

The core of the work is research, not selling. Before a headhunter approaches anyone, they map the relevant market: who works in a comparable role at which competitor, who has been promoted recently, who fits professionally and in terms of span of control. Only then does the approach itself begin. In larger consultancies the work is usually split between a consultant, who owns the mandate, and a researcher, who handles the market mapping. In smaller specialised firms both often sit in one pair of hands.

  • Working out the requirements profile together with the client, usually through a detailed briefing conversation covering the role, the company culture and the span of control
  • Market mapping and identification of potential candidates, often across sectors via networks, professional associations and platforms such as LinkedIn
  • A discreet first approach by phone or in person, combined with an initial suitability screening
  • In-depth interviews, sometimes supplemented by management diagnostics or structured reference conversations
  • Presentation of a shortlist to the client and support through to the signing of the contract

How little German companies have so far made of this channel shows up in a 2023 survey by CleverConnect, reported by the trade journal Personalwirtschaft: only 20 per cent of working people surveyed in Germany said they had ever been contacted through active sourcing. In France the figure was 27 per cent, in Italy 24. Direct approach here is therefore still a channel with plenty of room to grow, not a mass phenomenon. For companies that means the reverse is also true: search deliberately and you will run into candidates who have already been approached several times less often than in countries with a more intensive sourcing culture.

Headhunter, placement agency or executive search: where is the difference?

In job ads and everyday speech all three terms get thrown around interchangeably. Set out cleanly, it looks like this:

Term Who searches? Who pays? Typical target roles
Placement agency Candidates mostly come forward themselves; the agency matches them against open roles Usually the company, sometimes only on a successful placement Specialists, administrative roles, middle levels
Headhunter / direct approach Active, targeted approach to individual people in the market The commissioning company only Specialists, experts and executives
Executive search As a headhunter, with a structured method and usually management diagnostics The commissioning company only Managing directors, senior executives

In practice headhunting and executive search overlap heavily. Many consultancies, SCHLAGHECK + RADTKE among them, with sector focuses in automotive, mechanical engineering, medical technology, construction, plastics and chemicals, and IT, use the terms interchangeably depending on the audience. The BDU records that executive search, at 79 per cent of revenue, remains by far the sector's most important business, well ahead of classic placement. The practical difference from placement shows up above all at the starting point of the search. A placement agency usually works from a pool of candidates who have already signalled interest. A headhunter starts from zero, with a list of names built backwards from the target role rather than forwards from an existing pool.

How does a headhunting mandate run?

  1. First conversation and briefing: the requirements profile, company culture, salary range and timetable are agreed together
  2. Market analysis and creation of a longlist of potential candidates based on the requirements profile
  3. Discreet direct approach and a first screening by phone, usually outside the working hours of the person being approached
  4. Interviews in person, where appropriate supplemented by management diagnostics or technical tests
  5. Presentation of a shortlist, usually of three to five people, including an assessment of fit and motivation
  6. Interviews at the client and support through the contract negotiation
  7. Support during the onboarding phase, often combined with a contractual guarantee to search again should the appointment fail within an agreed period

An example from practice, anonymised and given for illustration: a mid-sized mechanical engineering company is looking for a new head of production, the current post-holder is retiring and the internal posting produces nothing. The headhunter identifies candidates in the market with a comparable span of control at competitors and suppliers, makes the first approach discreetly outside working hours, and presents a shortlist of four people after a few weeks. The company had not heard of two of them, even though both worked in the same region. A conventional job ad rarely produces a hit like that, because neither person was looking at the time they were approached.

"Most mid-sized companies do not come to us as a precaution. They come once the position has been open for several weeks and the usual channels have stopped producing anything." An executive search consultant at SCHLAGHECK + RADTKE (name anonymised for reasons of discretion).

What does a headhunter cost?

If you are looking for a new role yourself and a headhunter has approached you, the answer is simple: you pay nothing. The fee is paid, without exception, by the commissioning company. Two models are essentially in use in the sector: a pure contingency fee, due only when the candidate signs, or a retainer model with instalments across the course of the project. For executive search mandates the retainer is the rule, often split into three instalments: on commissioning, on presentation of the shortlist and on signature. The reason lies in the nature of the work. Market mapping, discreet approach and diagnostics take effort regardless of whether the search ends successfully, and so they have to be financed regardless of the outcome too.

A look at how the market is actually positioned helps you judge which roles justify such a mandate in the first place. According to the BDU, the sector's core business concentrates on annual salaries between 100,000 and 250,000 euros; mandates below 100,000 play only a minor role. If you want to fill an administrative position, you are more likely to end up with a classic placement agency than with an executive search mandate.

When is a headhunter worth it for a mid-sized company?

Not every open role needs a direct approach. Before commissioning one, check whether one or more of the following applies to your vacancy:

  • The position is so specialised, professionally or in its span of control, that the active candidate market produces hardly any suitable profiles
  • The replacement has to be handled discreetly, for instance because the current post-holder is still in office
  • Your own postings and job portals have produced nothing for weeks
  • Sector knowledge and an existing network in the target industry matter more than the sheer number of applications
  • The role sits in the salary segment where, according to the BDU, most of the sector's mandates are anyway, meaning above roughly 100,000 euros a year

For smaller roles that the labour market can fill readily, the effort of an executive search mandate is rarely justified. Look first at your own candidate pool and at the usual job portals before you consider a direct approach. What a search consultancy can do beyond that, and when commissioning one pays off at all, depends heavily on the individual case, from how urgent the vacancy is to how much discretion you need towards your own team.

Frequently asked questions about headhunters

Do I have to pay anything as a candidate if a headhunter contacts me?
No. The fee is borne in every case by the company that issued the mandate. Reputable headhunters ask candidates for no payment, neither for the approach nor for the placement.

How do I recognise a reputable headhunter?
By transparency about the client, by a concrete requirements profile rather than vague promises, and by the fact that they never ask the person approached for money. How they handle confidential information about your current employer also says a lot.

How long does a typical executive search take?
That depends heavily on the position, the sector and the demands of discretion. Blanket figures in weeks are best treated with caution; a more realistic picture comes from looking at your own starting position in a first conversation with the consultancy.

Do headhunters only work for large corporations?
No. The majority of Germany's 1,975 search consultancies are smaller, specialised firms whose mandates frequently come from mid-sized industry rather than from listed corporations.

What is the difference between active sourcing and headhunting?
Active sourcing is the technique of searching for candidates actively, through networks or databases. Headhunting describes the whole consulting mandate, of which active sourcing is one element alongside diagnostics and support.

Are you filling a specialist or leadership position where the usual channels are not getting you anywhere? SCHLAGHECK + RADTKE supports mid-sized companies in automotive, mechanical engineering, medical technology, construction, plastics and chemicals, and IT, from the first market analysis through to the signed contract. Get in touch with one of our offices in Düsseldorf/Meerbusch, Munich or Ulm and talk through your open position with no obligation.