Are headhunters being scalped?

There's little denying that headhunters are doing well out of the current market. But they're not doing as well as they did. And standards may be slipping.

Simon Hughes, head of research at Stratasearch, a 'search to search' specialist which headhunts headhunters, tells us the City hiring boom has created a candidate-short market for search professionals.

In their quest for manpower, Hughes says some search firms are now accepting consultants with a track record of less than 500k in annual fee generation. He says they are also hiring people with no track record at all as search consultants: "If they didn't, they wouldn't be taking on anyone."

A good headhunter can earn "a phenomenal amount of money" from billing clients 1m or 2m a year, says Hughes.

Ed Bathgate, MD of Longbottom Limited tells that a good headhunter should earn "north of 1m" this year on a basic of around 150k.

Nevertheless, things are not quite as good as they were. Penny-pinching banks are allegedly trying to cap the fees headhunters are earning at, say, 100k.

This is taking its toll. Bloomberg last week reported that Philippa Rose of eponymous financial services search firm The Rose Partnership was earning as much as 750k per person she placed in the 1990s.

Rose said capped fees have made her business less lucrative of late: in the most recent fiscal year her firm completed 50% more searches than in 2000-2001, but it earned 40% less in fees.