Headhunters

Commission for Headhunters

Headhunting and executive search is one of the most commission-intensive industries. With a total market of over $450 million annually and high fee structures, skilled headhunters can achieve significant earnings through commission.

Unlike regular recruitment, where agencies often work on a success basis with multiple competing agencies, headhunters typically operate on a retained or exclusive basis with guaranteed minimum fees.

Commission Models in Headhunting

Commission Calculation

Headhunter commission is typically calculated as a percentage of the fee the firm receives from the client. An example:

• Candidate placed with annual salary of $215,000
• Fee to firm: 30% = $64,500
• Consultant's commission (30%): $19,350

With tiered commission structures, the percentage can increase with high performance, so the most productive consultants can achieve up to 50% of the fee.

OTE in Headhunting

On-Target Earnings for headhunters typically lies significantly above the average for sales roles:

• Partner/Director: $215,000-430,000 annually
• Senior Consultant: $130,000-215,000 annually
• Consultant: $85,000-130,000 annually
• Associate/Researcher: $65,000-85,000 annually

Special Elements

The headhunting industry has several unique commission aspects:

• Guarantee period: Most contracts include 3-6 months guarantee. If the candidate leaves the position, the search must be restarted without additional fee
• Retained vs. contingency: In retained search, part of the fee is paid upfront, reducing risk
• Split-fee: When collaborating between consultants or offices, commission is shared
• Desk fee: Some firms charge a fixed amount before commission is paid

It is important to understand clawback provisions during the guarantee period. If a candidate leaves the position within the guarantee, commission may be recalled.

FAQ About Headhunter Commission

When is commission paid?

Commission is typically paid when the client has paid the invoice and the candidate has passed any probation period. In retained search, commission may be distributed over the three payment milestones.

What is the difference between retained and contingency commission?

In retained search, you are guaranteed part of the fee regardless of outcome. In contingency, you only receive commission on successful placement, but the rate is often higher.

Can you negotiate your commission rate?

Yes, experienced headhunters with documented results can often negotiate better rates, particularly when changing jobs or after hitting high quotas.