State of survival code heute10/9/2023 ![]() ![]() ![]() 'In the past two years we have completed every single mandate, with one exception in which the candidate turned down an offer and the client refused to go any higher.' If we're only paid on success, we can't afford for a search not to succeed. He says his firm routinely charges 15% to 30% of the fee up front and the rest only once an offer has been made. Tucker at ERG believes a model that is more heavily weighted towards payment on success should prevail whatever the economic climate. Companies with integrity won't negotiate too low because it is hard to increase rates again later.' But we're talking about one or two per cent. She says: 'Firms are also prepared to be more concessionary with fees. Thus it is more common for headhunters to charge, say, 30% of the fee up front, but then nothing else until completion, says Ruth Velenski, senior consultant with Penna BBM. Particularly with the current tough economic climate, there has been a greater willingness to negotiate on fees or on terms of payment. While some firms, particularly large international search firms, still manage to stick to this model, most offer some flexibility. On top of this came expenses, often charged as an additional percentage. The standard model for many years was to charge a third of the first year's salary in three tranches: a third on appointment, a third on presentation of the shortlist and a third on completion. So what are headhunters charging and what is a reasonable fee? Previously an HR manager in investment banking, Tucker says clients used to get ripped off badly by headhunters, and even today, he says: 'I think as an industry we probably overcharge.' He says that whereas 30% to 35% of first-year salary was a standard average fee a few years ago, today's norms are more like 25% to 30%.Īlthough, naturally enough, headhunters do their best to resist too much downward pressure, Tony Tucker, managing director of headhunter Executive Resourcing Group (ERG), believes the industry should not complain too loudly. ![]() Falling prices are a feature of all brokerage services and headhunting is no different, says Shaun Springer of headhunter Napier Scott. ![]()
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