Many companies are looking for and hiring new employees. Whether your company is looking to bring on new talent for a virtual or nonvirtual position, you may be considering using a headhunter or a recruiter.

Before deciding to work with either one, it’s important to understand what they do and the differences between them.

What Is a Headhunter?

A headhunter is an individual or company that finds potential candidates for the positions a company is looking to fill.

They may approach active job seekers as well as professionals who are already employed. They ensure that the candidates meet the company’s requirements, then pass that information to the company. Headhunters tend to be specialized in a certain field.

Headhunters vs. Recruiters

While a headhunter focuses on finding potential candidates, they do not generally do any hiring.

A recruiter is someone who works with the hiring process itself. Recruiters generally post job openings and are the initial contact person. They prescreen candidates and get a start on the hiring process. A recruiter tends to work with all kinds of job markets and helps job candidates get placed in the job that best fits their skills.

The COVID-19 pandemic opened up new opportunities for businesses, including hiring employees who work virtually from other locations.

This means that virtual positions are no longer necessarily limited to local talent, so you have a wide range of professionals to choose from for certain positions at your company.

After the Great Resignation, many more professionals are looking for virtual positions for greater work-life balance. However, sifting through a larger pool of job seekers can be overwhelming and time-consuming, so working with a headhunter or recruiter can be an effective way to narrow down your options.

What to Keep in Mind Before Hiring a Headhunter

• They find high-quality candidates.
• They generally hunt high-level candidates.
• They reach out to the candidates.
• They generally specialize in a certain market, making it easier to find unique candidates.
• They don’t do the hiring.

If you want to hire a full-time, high-quality professional for a specific high-level position, a headhunter could be a good option for your company.

What to Keep in Mind Before Hiring a Recruiter

• They could specialize in a certain market, but many work with a variety of industries.
• They tend to let the job candidates contact them.
• They handle the initial part of the hiring process.
• They help the job candidate find the best position for their skill set.

If you are looking to hire several new employees in different departments over the next few months, using a recruiter could be a good option for your company.

How Much Do They Cost?

A business has several options available when thinking about hiring a headhunter or a recruiter. You can hire contract, retained, or contingency-based headhunters or recruiters.

The actual costs vary by industry and location, so do your homework on the going rates in your area. For example, a headhunter could cost you 20% to 25% of the first-year salary of your hire and may also include the sign-on bonus. A contract-based recruiter generally charges 1.5 times the hourly salary of the role you are looking to fill.

Make sure that you are clear on what is and is not included in the arrangement to avoid any last-minute surprises.

Are They Effective?

Yes, both headhunters and recruiters can be effective. But it’s important to research them thoroughly since some are more effective than others.

Don’t allow the cost to be the only factor in your decision. The most expensive headhunter isn’t necessarily the best one, but you may not get the best results if you want the cheapest headhunter available. And a contingency-based recruiter may rush to fill the position just to get paid instead of finding the best fit.

To help you make a good decision for your company and unique situation, research the person or company online and on LinkedIn.

Do they have positive testimonials or ratings? Has anyone in your network worked with them? Could someone in your network provide you with a reference?

Then, weigh the initial costs of hiring a headhunter or recruiter against the long-term business benefits of having those positions filled.

This blog originally appeared at U.S. News on September 7, 2023.

About the Author: Hallie Crawford is a career coach and author. To learn more about her, you can visit her website.