Headhunters paid more for scalps
Employees aren't the only ones who can command higher pay in a tight market. It seems headhunters are doing rather well too.
Financial services recruiters in the US are now receiving fees similar to Hollywood agents according to the Wall Street Letter. Their UK counterparts confirm that fees are also advancing this side of the Atlantic, although the increase is more on a par with Shepperton Studios than Tinsel Town.
"We are less prepared to compromise on fees than we were in the past," says the head of one US search firm in London. "At the same time, we're seeing fees rise as compensation itself rises - they're up 15% to 20% on last year."
"A search fee is typically 30% of total compensation," comments the global head of recruitment at one European bank in London. "In recent months, that's increased marginally to 33%."
Search fees are usually paid in three slices: when the company is mandated, on the production of a shortlist and once a candidate has been hired. In the downturn of 2001 and 2002 many firms were forced to cut fees considerably and forego the upfront retained element in favour of a fee focused on delivery.
The experience appears to have had a lasting impact. "We don't want to increase fees too much in case it comes back to bite us," says the managing director of one financial services-focused search firm. "If you put clients over a barrel in good times, they'll remember it when times are bad."
