Why are recruiters expensive

The right headhunter is worth the money

“Headhunters are way too expensive,” is a common prejudice. At first glance, the fee for the successful placement of a preferred candidate, usually around a third of the annual salary, may seem impressive. At second glance, the amount is quickly put into perspective when you compare it with the internal recruiting costs. “In addition, many HR departments are overwhelmed with finding the right talent for a particular position. If this leads to incorrect appointments, it becomes really expensive, ”says Dirk Brandhoff, Senior Partner of the HR Expert Group.

“Filling vacancies through in-house recruiting is no cheaper than engaging a good personnel consultancy,” Dirk Brandhoff is convinced.

A fallacy: in-house recruiting is cheaper than a headhunter

“Filling vacancies through in-house recruiting is no cheaper than engaging a good personnel consultancy. In addition, the right personnel consultant will fill vacant positions with a much better quality and with more lasting success, ”Dirk Brandhoff is convinced.

In his experience, most companies - whether in the manufacturing industry or in the service sector - have a very great need for external support when it comes to recruiting the right employees for open positions.

“After all, the company's own resources are usually insufficient. Or they are not qualified enough to fill vacancies, especially in management and specialist areas, successfully and, above all, in the long term, ”says the senior partner of the HR expert group.

That's really how high the internal recruiting costs are

But many companies shy away from using an external specialist when looking for a job because of the supposedly high fees. However, a closer look at internal recruiting costs can quickly put these concerns into perspective. Dirk Brandhoff makes this clear in a sample calculation.

If a position is to be filled, the company usually incurs internal costs through the following measures:

  • Ad design for print and online media by the marketing department
  • internal briefings and coordination between HR, marketing and specialist departments
  • Viewing and evaluating applications
  • Appointment coordination, job interviews and interviews
  • other handling costs

If these internal costs are now added to the prices of job advertisements in various media, then, according to Brandhoff, the following final amounts result for in-house recruiting.

Total costs of in-house recruiting for an advertisement ...

  • on your own homepage and on a leading job portal on the Internet (duration only 14 - 30 days): approx. 15,000 euros
  • in a regional print medium (running time only one day): around 25,000 euros
  • in a national print medium (running time only one day and parallel on the Internet for a maximum of four weeks): approx. 31,000 euros

Note: A detailed list of the costs of in-house recruiting can be requested from the HR expert group: [email protected]

"In contrast, the headhunter costs of a sample project - for a position in middle management or for a specialist - range between 25,000 and 30,000 euros," says Brandhoff. This sample calculation makes it clear that executive search usually costs no more than in-house recruiting.

High damage from incorrect appointments

Ultimately, however, the result is even more valuable for the searching company: To have found exactly the right candidate for the position. “For at least every third newly filled position, the German economy incurs losses of between 30,000 and 700,000 euros because the“ matching ”is not right and the candidate and job simply do not go together,” explains Brandhoff.

These sums result from the expenses for the recruitment of a new employee, the salary paid up to the termination and the costs for the induction. In the case of incorrect appointments to executives, one even assumes economic damage in the amount of 1.5 to 3 times the annual salary.

But that's not all: the actual minus that a company can suffer from incorrect appointments is far greater. In addition, there are other factors that can hardly be measured in concrete figures: Declines in productivity, possible damage to the company's image and much more.

Advantage of headhunters: better fit of the candidates

"When a good consultant is involved, the accuracy of fit and quality of the possible candidates are far higher than when recruiting by the HR department," says Brandhoff. An important reason for this is that the usual search methods such as advertisements are rather unsuitable for attracting excellent managers and specialists.

After all, top executives are usually not actively looking for a new job and therefore usually do not respond to job advertisements. The only thing that helps here is the direct approach of suitable candidates by an experienced personnel consultant.

Conclusion: The use of executive search pays off

As the calculation example shows, filling vacancies through in-house recruiting is no cheaper than engaging a good personnel consultancy. In addition, the right headhunter can fill vacant positions in a much better quality and more sustainably than their own personnel department, says Brandhoff. A high turnover and mediocre employees, on the other hand, cost a company dearly.