A Headhunter Firm and a Recruitment Agency are very different animals. A bit like a dog and a cat. Yes, their ultimate objective is the same, for a client company to hire a professional that they introduce. But that is where the similarity ends.
“It is like flying Business Class or Economy” – the end goal is the same but the journey to get there is worlds apart.
As an Executive Headhunter I have covered the Indonesia market since 2010. In 2009, sat in my London flat, I decided that I wanted to return to SE Asia. I remember googling “Headhunter firms Indonesia”. There were only a few results.
In essence, the Indonesian Recruitment Industry is still very young.
As a huge, rapid growth emerging market, Indonesia is a great place to live and work. But with the country’s developing stage of maturity there are also a few challenges for an old school Headhunter firm like ProCapita.
First, local hiring managers are often unaware that there is a huge difference between a Headhunter Firm and a Recruitment Agency.
Second, there are very few “real” Headhunter firms in Indonesia. But every Recruitment Agency is happy to describe themselves as a “Headhunter”.
A local company is often not aware that a Headhunter firm and a Recruitment agency work in a very different way, have distinct recruitment processes and service standards. That they specialize in different types of hiring.
An Indonesian HR or hiring manager may not realize that there are important, extra services, that they will receive from a true Headhunter consultancy. Similarly, they may not understand why a Headhunter firms pricing is higher than a mainstream “Recruitment Agency”.
So What is a Headhunter Firm?
A Headhunter Firm – also called an Executive Search Agency – is focused on helping companies with their Senior Level or Challenging appointments.
Typically this involves Hires at the C-Level / top 3 levels of an organisation hierarchy. A Headhunter may also be used for Mid-Level but Complicated searches
A Headhunter firm works in a highly specialised manner, one that is optimised for critical hires.
Therefore, a Headhunter consultant should be an experienced professional themselves, ideally having worked in both executive search and industry roles for many years.
They need this experience to be able to effectively manage senior level candidates and hiring managers throughout the recruitment process.
When working on an executive search a Headhunter keeps Confidentiality at the top of their mind.
A client company typically does Not want the market to know anything about their senior hiring plans. For instance: 1) They do not want competitors to find out – it’s a secret. 2) Or they do not want internal staff to be aware that a new hire is sought. 3) Also the business maybe looking to replace an existing senior member of the team.
At the same time, senior executive candidates demand confidentiality. The last thing that they want is for anyone to know that they are interviewing with another firm.
For a Headhunter, social media Job Advertising is NEVER used to attract candidate interest.
It is far too public and sets totally the wrong image.
Therefore, a Headhunter works in a traditional, old school way.
They are Research led, with some team members focused entirely on building and maintaining the Executive Candidate Database. As such, they keep up to date on the status for all senior professionals that sit in their area of expertise.
When taking on a new assignment a Headhunter consultant will need to gain a crystal clear understanding of their clients exact needs. This will cover key skills required, career experience needed, background desired, education required, personality type sought, leadership style desired and etc. The “wish-list” is often long!
After that, the Headhunter will identify all potentially relevant professionals. This could involve a domestic, regional or global candidate search. People that may have the “magical ingredients needed”. They build the candidate longlist.
The Headhunter consultant will then Directly reach out to each senior executive on the candidate longlist. Professionally market their client business and the executive vacancy. If, for confidentiality reasons, the client does not want the Headhunter to release the company name on 1st candidate approach, the Headhunter will explain the opportunity on a No Name basis.
99% of the candidates that ProCapita approaches are happily employed and not actively job seeking. What is called “Passive”.
A good Headhunter will be able to quickly assess if an interested executive candidate is a strong fit or not. If a good match, they will submit the Resume to their client company.
After that, the Headhunter will manage the entire recruitment process. This includes coordinating client-candidate interviews, collecting a candidates detailed current compensation data when at Offer Stage. They will act as the middleman for any client-candidate financial negotiation. They will perform reference checks on the selected candidate. And they will assist the executive throughout their resignation process.
In addition, if there is a Counter-Offer scenario the Headhunter will work hard to keep the executive candidate aligned and focused.
Above all, the Headhunter manages the end-to-end recruitment process. Everything is focused around senior level professionals, both on the client side and the candidate side. Senior professionals always have questions, concerns.
A good Headhunter is always working to find solutions when hurdles appear. All of this requires an experienced consultant, as otherwise things can go wrong and fast.
Headhunters focus on Quality vs Quantity.
Their success as a firm is 100% linked to their ability to help companies secure best-in-class senior talent.
In developed markets such as Europe or the USA, a business would automatically use the services of a Headhunter firm for any Senior-Level or complicated hire.
A Headhunters pricing is aligned to the bespoke service that it provides, the senior consultants that it employs and the cost incurred for each executive search performed. A typical rate in Indonesia for a Headhunter firm is approximately 25% of the hired candidates Total Year 1 Cash Income.
For a Headhunter consultancy like ProCapita, where we are fully committed to achieving success for our clients and believe strongly in our ability to deliver, We are happy to work on a Success Fee Only basis.
A Success Fee Service is also what the majority of companies demand in Indonesia, based on the stage of maturity of the local recruitment market. Therefore, a company has no up-front financial risk when using our services. They only pay if we succeed.
So How Does a Recruitment Agency Work?
A Recruitment Agency is set-up to assist companies with their volume driven Mid-Level hiring needs.
Large companies often have a lot of recruitment at the Mid-Level and the sooner people are on-board the better. Therefore, Recruitment Agencies work in a stream-lined manner. Fast results are the top priority.
At the Mid-Level a candidates job skills and work experience are the main focus. Not leadership or transformation capabilities. Therefore, it is much easier for a Recruitment Agent to identify a good fit to a clients needs based purely on a persons Resume / CV.
A Recruiter will often be a young, junior professional. Which is fine, as they are dealing with less experienced candidates and less challenging circumstances.
Companies will often use multiple recruitment agencies at the same time. Why? Because the key requirement at the Mid-Level is speed of delivery.
Mid-Level hires typically need to be “Good” but Not Perfect. At this level in the corporate hierarchy they are not quite as critical to overall organisation success.
Therefore, there is less focus on confidentiality. When recruiting a Manager there is generally not the need for top level secrecy. Unless the hire is replacing a current under-performing member of staff.
For a Recruitment Agency, Social Media Job Advertising is the MAIN method to attract candidates.
Of course, you have seen the Linkedin Job Ads. They provide a quick overview about a hiring company and its vacancy, a rundown of the core skills and experience needed.
In addition, over the years a Recruitment Agency collects the CVs of active job seekers. People that have applied to previous Job Ads.
If a relevant candidate applies to their Job Ad, they submit the CV to their client. Or if a relevant persons CV is already in their Database, they will ask the candidate if the role is of interest.
In other words, a Recruitment Agency Focuses on Active Job Seekers.
People that are currently investing their time online to find and apply for new work opportunities.
Online is a perfect, low cost method to identify active candidates at the Mid-Level. After all, a job ad is a lot cheaper to run than the time and resource cost of directly going door to door, pitching and talking to passive candidates.
A Recruitment Agency also assists with interview arrangements and at the Offer Stage submits the chosen persons current pay-slip data. Often, the Offer and Negotiation process will be handled by the hiring manager themselves.
Above all, a Recruitment Agency focuses on a stream-lined process. They always charge on a Success Fee (Contingency) basis and the emphasis is on volume and speed. The main focus is candidate identification via online Job Advertising.
Because they work on more simple, commoditised, Mid-Level hiring, a Recruiter can be a few years out of university.
Recruitment Agency prices in Indonesia vary between 12-18% of a hired candidates 1st Year Compensation.
In conclusion, both types of business – Headhunter Firm or Recruitment Agency – work very well for the nature of hiring that they are aligned to.
Headhunters provide the bespoke, research led, confidential, direct candidate approach service that is needed for senior / critical hires.
An experienced Headhunter is well matched to handle the questions and concerns of a senior executive. They can get things over the finishing line, which is the most challenging part of Senior-Level recruitment.
A Headhunter Firm is used for senior appointments due to the challenging nature of the hiring process at hand. Their higher price is due to the tailored search that must be performed. The critical nature of the hire – and getting it right – is the top priority.
On the other hand, Recruitment Agencies provide a lower cost service for more volume driven Mid-Level hiring. For these roles, confidentiality is not the focus, a Good Candidate is Needed Not a Perfect Candidate.
Job Board advertising suffices for active candidate identification, it is about getting a person on-board asap. A young recruiter is enough.
Luckily, as the Indonesian market matures and hiring managers gain more experience using the different types of “Recruitment Firm”, they are starting to understand when to use each.
After all, there’s a talent war taking place in most local industries. To use the wrong type of “Recruiter” for Senior Level appointments can prove disastrous.
If it is a critical hire, having it left open for a long period of time presents a huge opportunity cost to a business. But if a hiring manager is not aware of the difference between a Headhunter Firm and a Recruitment Agency, how they each work, they will often focus on the lowest cost option. Choose to fly Economy instead of Business Class.
Rather than getting to their destination in a fast, efficient, direct manner – they have to make a lot of stops on the journey and end up exhausted.
We know this happens a lot, as those same firms then come to us for assistance.
For companies that are looking to make a Senior Appointment in Indonesia, please have a look at This Article which gives an overview about our Indonesia Executive Search Services.
Similarly, have a look at This Article which gives our Headhunter tips on how to successfully handle a C-Level hire in Indonesia.
For Businesses that are looking to hire Executive Talent in Indonesia please submit your Enquiry Here. Or you can reach us through our Contact Details Here. A Senior Headhunter Consultant will respond within a few hours.