In times of a shortage of specialists and executives in Germany, it is increasingly difficult for HR managers to find top candidates through conventional recruitment channels. What has long been common practice for many large corporations is slowly becoming more attractive for medium-sized companies as well: Partnering with a headhunter in Germany when looking for executives.
Human resources are increasingly becoming a competitive factor, especially in the area of highly qualified specialists and executives. In the future, it will be of importance to fill key positions within the company not only quickly, but also to meet the company’s requirements and fill roles on a sustainable basis.
What benefits do headhunters, executive search consultancies and HR consulting firms bring to companies when recruiting executives? What needs to be paid attention to when working together? These and further questions in connection with headhunting in Germany will be discussed in the following article.
What’s the Job of a Headhunter?
Ideally, the portfolio of the headhunter in Germany covers the entire placement process from the creation of the requirement profile to the successful integration of a candidate within the client’s organization.
Important steps and services that headhunters in Germany should offer are:
- Research the client’s company, the industry, potential competitors, recent market developments, and potential candidates;
- Identify potential candidates for an open position;
- Outreach potential candidates via a discrete and direct approach;
- Make an initial selection of candidates;
- Present the best candidates to the client and support with the final selection process accordingly.
The exact responsibilities of the headhunter in Germany should be determined after a preliminary interview.
Besides the mere direct search, the headhunter can also carry out sub-processes of candidate selection process. Ultimately, the decision in favor of or against a potential candidate remains with the client.
How a Headhunter in Germany identifies executives?
According to a study by the Federal Association of German Management Consultants (Bundesverband Deutscher Unternehmensberater BDU e.V.), headhunters and recruitment companies in Germany tend to use the following methods to identify executives on behalf of their clients:
- 56% – Direct Search: I.e. the personal approach of candidates by a headhunter;
- 16% – Combination of Direct Search and Internet Search: I.e. via online networks such as LinkedIn and Xing (without advertisement search);
- 11% – Direct, Advertisement and Database/Internet Search.
As of December 2019, 5,000 HR consulting companies are active in Germany. Most of them are specializing either in individual industries, specific economic sectors or managerial levels.
The Origins of Headhunting
Headhunting is a human resources consulting service that was originally developed in the USA in the early 1950s. It is closely related to recruitment and is also referred to as direct search by headhunters in Germany.
Up until the 1990s, headhunting was almost exclusively limited to top management positions for large corporations. Nevertheless, in times of a shortage of specialists and executives, other target groups are also increasingly in focus.
What is Executive Search in Germany?
Executive search is defined as the search for top-management level executives. The term recruitment is also closely related to direct search or headhunting.
According to the definition of the Federal Association of Temporary Employment (Bundesverband Zeitarbeit), recruitment agencies bring together companies looking for qualified job seekers. The task profile of a recruiter is relatively similar to that of a headhunter.
However, a distinction must be made between the fact that recruiters do not directly entice executives level positions from other firms as they tend to work like private employment agencies with a database of candidates at their hand.
Working with Headhunters in Germany
When expanding to Germany, working with a headhunter can be beneficial in many ways.
The key benefits are the following:
- Headhunters can reduce the risk of filling a position incorrectly;
- Good headhunters bring along a qualified pool of executives that companies would not be able to access in the first place;
- External headhunters can raise awareness on issues with the management directly that are difficult to communicate through the HR department;
- Experienced headhunters have a sense for the client’s corporate culture in which applicants must fit in;
- Significant reduction of time and cost of interviews through the headhunter’s initial selection;
- Compensation of internal HR department’s lack of professional know-how and time resources.
Where to Find Headhunters in Germany?
Headhunters in Germany are particularly popular in metropolitan areas where there is a lot of competition between individual companies.
Therefore, it is not surprising that headhunters are sought and booked to entice top executives for companies in the following cities: Munich, Hamburg, Berlin, Düsseldorf, Frankfurt, Cologne and Stuttgart.
In which industries is headhunting particularly popular?
It has become a common practice for headhunters to work in many industries. The most important factors are the size of the company and whether it is profitable for the company to engage a headhunter.
Nevertheless, companies tend to engage headhunters in industries where highly qualified executives with a specific profiles appear.
In Germany, headhunting is a common practice within the following industries:
- IT;
- Logistics;
- Marketing & Sales;
- Pharma & MedTech;
- Lawyers & Legal Experts;
- Finance.
Selecting a Headhunter in Germany
Prior selecting a headhunter to place a candidate for an open management position, it’s important whether to choose a small or large headhunting firm.
Smaller headhunting firm are advantageous in terms of providing an individualized service and exclusivity. In contrast, a larger firm might be able to offer a greater number of candidates within their candidate the database.
How to Select the Right Headhunter in Germany?
Regardless of the size of the headhunter in Germany, the following selection criteria should be taken into account:
- Number of references;
- Industry and market-specific knowledge;
- Work experience and professional background (e.g. psychological training);
- Specialist and methodological know-how (e.g. personal diagnostic procedures used);
- Price structure and price level.
How much does it cost to engage headhunters in Germany?
The following remuneration models are common amongst headhunters in Germany:
- Percentage;
- Fixed fee per project;
- Individual pricing arrangements;
- Success-based fee (rather uncommon within headhunting).
In practice, headhunting firms apply fixed fees and percentage models when recruiting executives in Germany. Usually, fees range around 25 to 30 percent of the candidate’s annual gross salary.
Both variants can be applied in practice. For a position with an annual salary of 100,000€ , one can expect to pay between 25,000€ and 30,000€ in fees.
A part of the fee is usually due at the beginning. A reason for this is that a headhunter has considerable expenses for travel, research and contacting at the beginning of the assignment.
Germany’s Best Headhunter: Universal Hires
Distinguished as the leading recruitment agency in Germany, headquartered headhunter firm Universal Hires has a reputation for excellence. Through a multicultural and vast experience in hiring top executive and management talent in Germany.
With a network of local and international recruitment experts, the team at Universal Hires can access the right executives for international corporations looking to grow their business within the German market.
Benefits of Engaging with a Headhunter in Germany
The main benefit of headhunting is that headhunters can source and identify the most qualified candidates to match your requirements. They have wide-ranging networks of professionals and potential candidates that they can tap into. This can lead to significant cost saving potentials in comparison to an internal recruitment project.
In addition, headhunters personalize direct engagement with each potential candidate. They understand that an unrefined approach will not appeal to individual candidates. Therefore, in order to engage with the best candidates in the market, an approach is required to understand each candidate.
Finally, headhunters in Germany move much more quickly and proactively compared to internal HR and recruitment departments. As they are only paid on the successful placement of an executive candidate, they have an incentive to find the best talent for your business as quickly as possible.